Nathan v Smilovitch & Anor

An appeal against findings of fact may warrant permission even though the appellant faces an uphill task. That is particularly so where the findings depend on inferences from surrounding circumstances rather than solely on assessments of witness credibility, and the proposed challenge has a real prospect of success. The fact-sensitive character of the appeal does not make appellate intervention impossible.

The dispute arose from an alleged property joint venture. Ferris J held that three groups of leasehold properties formed part of the venture, despite rejecting the evidence of both principal parties except where corroborated or highly probable. Zvi Smilovitch sought permission to appeal, arguing that the findings rested on inferences from surrounding circumstances and conflicted with evidence about third-party funding and profit-sharing arrangements. A single Lord Justice refused permission on paper. On renewed application, the central issue was whether the proposed challenge nevertheless had a real prospect of success.

Lord Justice Aldous granted permission to appeal. The order did not determine whether the properties formed part of the joint venture.

1. Nature of the findings. The trial judge had found both principal witnesses unreliable. He therefore decided the disputed issues by reference to surrounding circumstances, contemporary material and evidence from other witnesses.
2. Prospect of success. An appeal seeking to reverse findings of fact presents an uphill task, but it is not impossible where the findings depend on inferences from the surrounding circumstances. The proposed arguments showed a real prospect that the inferences drawn by the judge might be reconsidered.
3. Competing evidence. Evidence from a witness about a third-party 50/50 profit-sharing arrangement, which the judge had not criticised, provided a substantial basis for challenging the conclusion that the properties belonged to the joint venture. The alleged financial consequences for Smilovitch also made the competing inference sufficiently arguable.
4. Order. The application for permission to appeal was granted. The costs of the application were ordered to be costs in the appeal.

• Court of Appeal (Civil Division): On renewed application, Lord Justice Aldous granted permission to appeal.
• High Court of Justice, Chancery Division: Ferris J, in a judgment dated 31 July 2001, held that the specified properties formed part of the joint venture.
• Court of Appeal, single Lord Justice: Permission to appeal was refused on paper.