Trevellyan Developments Ltd v Schivaharan

Serious allegations in civil proceedings remain subject to the balance of probabilities. The court must, however, have regard to the inherent improbability of the allegation and require evidence of sufficient cogency. A finding of liability may be based on cumulative circumstantial evidence, including unexplained trading losses, conduct consistent with misappropriation and unreliable evidence, even where there is no direct evidence of each individual loss. Where misappropriation has occurred over an extended period and precise loss cannot be proved, the court may make a reasonable assessment of compensation rather than decline to award damages.

The claimant employer sued its former petrol-station manager for losses allegedly caused by theft of stock, manipulation of newspaper returns and unauthorised telephone use. The Central London County Court found liability and awarded £8,250, dismissing the counterclaim. The defendant appealed against the judgment on the claim, challenging the sufficiency and admissibility of the evidence, the findings on credibility and liability, and the assessment of damages. The central issues were whether the evidence established dishonest conduct on the balance of probabilities and whether the damages assessment was permissible despite the absence of precise evidence of loss.

Appeal dismissed. The Court of Appeal, in a judgment delivered by Lord Justice Jonathan Parker and agreed with by Lord Justice Mance, upheld the award of £8,250.

1. The trial judge was entitled to reject the defendant’s evidence. An appellate court should recognise the trial judge’s advantage in assessing credibility.
2. The judge had the applicable standard of proof in mind. The seriousness of the allegations required sufficiently cogent evidence, but did not impose a different standard from the balance of probabilities. The guidance in In re H [1996] AC 563, including the principle stated in In re Dellow’s Will Trust [1964] 1 WLR 451, was applied.
3. Liability was supported by cumulative evidence: the dramatic fall in gross profit margins during the defendant’s management and their recovery after dismissal; the corresponding collapse in newspaper profitability; evidence of goods being removed from the premises; test purchases of identical or similar goods; missing purchase invoices; and the defendant’s dishonest and implausible explanations. The court considered that this evidence was sufficient even without relying on the pressured interview admissions, unidentified informant or certain hearsay evidence.
4. The employer’s accountant was entitled to explain the figures as a witness of fact. It was for the judge to draw the relevant inferences from them. The absence of expert evidence from the defendant did not make the evidence inadmissible.
5. Once liability was established, the judge was entitled to do the best he could on the available evidence. In cases involving stock misappropriation over an extended period, precise proof of loss may be impossible. The assessment of £8,250 was not founded on an error of principle.

Lord Justice Mance added concerns about the informality of the trial and the manner in which the admissions had been obtained, but agreed that the appeal could be decided without relying on those admissions.

• Court of Appeal (Civil Division): dismissed the defendant’s appeal and upheld the Central London County Court judgment awarding £8,250 and dismissing the counterclaim.
• Central London County Court: His Honour Judge Medawar QC entered judgment for the claimant on 14 October 1999.