Trka & Anor v Hulbert & Ors

An appellate court should not displace a decision favourable to a party acquitted of fraud except on the clearest grounds. Greater caution is required where the findings depend substantially on oral evidence. The trial judge’s immersion in the evidence and overall evaluation are important, although the fact that the judge saw and heard the witnesses is not conclusive. In a civil case, the more serious the allegation, the higher the standard of proof required: re H [1996] AC 593. An appellate court should intervene only where the evidence or its sheer logic compels the conclusion that the trial judge was wrong.

The claimants appealed from the dismissal by Cox J, sitting in the Nottingham County Court on 6 March 2007, of their action against the Hulbert brothers and the relevant companies. Proceedings against Carl Biddles were undefended and judgment had been obtained against him.

The dispute concerned the alleged sale of Proline Travel Ltd’s bus-business assets to Four Ace Travel Ltd. The claimants said that a Bill of Sale relied on by the defendants was a sham or forgery and challenged the trial judge’s assessment of the witnesses. Permission to appeal was granted, and the appeal was confined to questions of fact. The central issue was whether the judge had been wrong to reject the claimants’ account.

The appeal was dismissed unanimously. Lord Justice Jacob gave the leading judgment. Lord Justice Dyson and the Master of the Rolls agreed.

1. Applicable appellate approach. The appeal was solely on fact. The principles governing appellate intervention had been summarised in Assicurazione Generali v Arab Insurance Group [2002] EWCA Civ 1642, with the relevant passage reported at [2003] 1 WLR 577 and approved in Datec Electronic Holdings v UPS [2007] 1 WLR 1325. A finding favourable to a party acquitted of fraud should not be displaced except on the clearest grounds. Appellate reluctance is increased where findings depend essentially on oral evidence.
2. Standard of proof. The allegations involved fraud, forgery, deliberate perjury and conspiracy to pervert the course of justice. The trial judge therefore had to apply the civil rule that the more serious the allegation, the higher the standard of proof required, as stated in re H [1996] AC 593.
3. Importance of the trial judge’s evaluation. Seeing and hearing witnesses was important but should not be taken too far. More significant was the judge’s immersion in four days of evidence. Expressed findings are necessarily incomplete and may leave matters of emphasis, weight and nuance unrecorded. That justified appellate caution, as explained in Biogen v Medeva [1997] RPC 1.
4. Application. The judge had material on which to find Mr Trka incoherent and unreliable. The alleged dishonesty of Mr Biddles did not establish dishonesty by the Hulberts. The disputed invoice could properly be treated as a red herring. The Bill of Sale did not stand alone: prior discussions had taken place with Mr Trka present, and his later conduct was consistent with the document. Its unusual drafting, the late reliance on it and inconsistencies in the witnesses’ accounts did not compel a finding of forgery.
5. The judge was entitled to regard Mr Hulbert as essentially honest despite an inaccurate passage in his evidence, and to accept Mr Stretton’s evidence that he witnessed the signatures. The overall evidence did not make the defendants’ account impossible. The threshold for appellate intervention was therefore not met.

• Court of Appeal (Civil Division), [2007] EWCA Civ 1224: dismissed the appeal.
• Nottingham County Court, Cox J, 6 March 2007: dismissed the claim against the relevant defendants; judgment had separately been obtained against Carl Biddles in undefended proceedings.