Thompson v Bryant Homes Northern Ltd

An appellate court may uphold a trial judge’s factual conclusion based on correspondence, subsequent conduct and inherent probabilities, even where the primary witness has an imperfect recollection. The judge must assess all relevant evidence in a balanced way and must not select only the evidence supporting the preferred conclusion. An adverse inference should not ordinarily be drawn from a party’s failure to call a witness where a credible explanation is provided. Such an error will not necessarily invalidate the decision if it played no material part in the findings. The Court dismissed the appeal because the trial judge’s conclusion that the contractual drainage covenant survived the transfer was supported by the evidence.

Bryant Homes exercised an option to purchase development land from David Thompson. The original agreement contained a primary covenant requiring Bryant to provide drainage connections capable of serving up to 20 houses on Thompson’s retained land, subject to statutory consents, and an alternative covenant concerning the existing dwellings.

The transfer included the reservation and a modified form of the alternative covenant, but omitted the primary covenant. Thompson contended that the parties had agreed that the primary covenant would remain binding despite its omission from the transfer. Bryant contended that the obligations had been abandoned.

Following a preliminary trial, His Honour Judge Langan QC found for Thompson. The appeal concerned whether the judge had properly evaluated the correspondence, the parties’ subsequent conduct, inherent probabilities and the failure to call a senior witness.

1. Appeal dismissed. The trial judge was entitled to determine whether the primary drainage covenant remained binding by considering the correspondence, subsequent conduct and inherent probabilities, despite the imperfect recollection of the principal solicitor.
2. The judge had to assess the evidence as a whole and could not rely selectively on matters supporting Thompson’s case. The Court of Appeal concluded that the judge had in fact made a balanced assessment. His findings concerning the negotiations were substantially consistent with the correspondence.
3. The evidence supported the conclusion that Bryant’s solicitors had proposed removing the primary covenant from the transfer, while Thompson’s solicitor had insisted that the underlying contractual rights remained. The subsequent conduct of Bryant’s personnel and the revised information pack were consistent with the survival of the primary covenant.
4. The judge was wrong to draw an adverse inference from Bryant’s failure to call Mr Monkman. A court should not draw such an inference where there is a credible explanation for the witness’s absence, applying the approach in T C Coombs v IRC [1991] 2 AC 283 and Wisniewski v Central Manchester Health Authority. The error did not undermine the factual findings because the inference played no substantial part in the judgment.
5. Lord Justice Robert Walker and Lord Justice Auld agreed with Arden LJ. Lord Justice Walker added that, as a matter of language, the primary and alternative covenants were plainly alternative, although their practical operation might have appeared cumulative.

Appeal dismissed with costs as agreed.

• Court of Appeal (Civil Division): Appeal from the order of His Honour Judge Langan QC dated 26 October 2001 dismissed, with costs as agreed.
• Chancery Division, Leeds District Registry: Following trial of a preliminary issue, declared that David Thompson was entitled to rely on clause 4.5.3.3 of the agreement.