Sutton v Hutchinson

On an appeal challenging factual findings as perverse, the question is not whether the appellate court would have evaluated individual matters differently. The judgment must be one which no reasonable judge, having heard the evidence, could have reached. Apparent inconsistencies in financial records may be only part of a wider evidential picture, particularly where credibility, documents and supporting testimony have been assessed at trial. A point based on an analysis never put to the witness or trial judge is ordinarily an unfair basis for appellate intervention. Where money is genuinely advanced as a loan, its consideration is the promise of repayment. The fact that other payments were made for sexual services does not, without more, taint the loan with illegality where the claim does not rely on the immoral or illegal arrangement.

The claimant brought proceedings in the Central London County Court seeking repayment of £73,000 said to have been lent to the defendant. The defendant maintained that traceable payments were remuneration for escort and sexual services and denied receiving alleged cash payments. After a four-day trial, HHJ Harris entered judgment for the claimant on 28 January 2005.

The defendant appealed, alleging that the judge had failed to give a reasoned judgment and had reached a conclusion unsupported by the evidence or amounting to perversity. The appeal focused on the claimant’s income and expenditure, alleged circular cash transfers, the authenticity of loan documents and whether the loans were tainted by illegality because of the parties’ sexual relationship.

1. Appeal dismissed. The Court of Appeal unanimously upheld the judgment for £73,000.
2. The challenge based on the claimant’s overall income and expenditure could not properly undermine the judgment. The point had not been put to the claimant during his two days of cross-examination or to the trial judge. It would therefore have been unfair to hold the point against the claimant or to treat it as demonstrating that the loans were impossible.
3. The alleged circular movement of cash between accounts was an odd and murky feature of the evidence, but it was only part of a complicated case. The trial judge was entitled to assess it together with the parties’ credibility, contemporaneous documents, the claimant’s explanations, and supporting evidence from another witness. The documents substantially supported the claimant’s account, and the judge’s conclusion was plainly open to him.
4. A finding of fact is not perverse merely because particular transactions are difficult to explain or because the appellate court might have viewed individual matters differently. Intervention requires a conclusion which no reasonable judge, having heard the evidence, could have reached. That threshold was not met.
5. As to illegality, if the payments were genuine loans distinct from payments for sexual services, the consideration for the loans was the promise of repayment. The surrounding sexual relationship and the passage of other monies for sexual services did not of themselves invalidate the loans. The claimant’s straightforward claim for repayment did not depend on enforcing an immoral or illegal bargain.

Lords Justice Keene and Gage agreed with Lord Justice Ward. The appeal was dismissed.

1. Court of Appeal (Civil Division): In [2005] EWCA Civ 1773, the appeal from the County Court judgment was dismissed.
2. Central London County Court: HHJ Harris entered judgment for the claimant for £73,000 on 28 January 2005 after a four-day trial.