Fen & Ors v D'Cruz & Ors

Where a claim is not founded on fraud, dishonesty need not be pleaded merely because it becomes an evidential inference when conflicting accounts are resolved. The party must nevertheless understand and have a fair opportunity to meet the factual case. An appellate court will ordinarily uphold a trial judge’s careful findings on credibility where they depend on oral evidence and are tested against documents, objective circumstances, motives and probabilities. A minor factual error, or a possible procedural imperfection lacking material impact, will not undermine an otherwise sustainable factual conclusion.

Three claimants alleged that, at a meeting concerning immigration applications, Mr Low held Mr D’Cruz out as a solicitor or partner in Whitehead and Low. They said that, in reliance on that representation, they paid Mr D’Cruz substantial sums for visa services which he did not provide.

Dobbs J accepted the claimants’ account, rejected Mr Low’s evidence, and gave judgment for the claimants for £23,500 plus interest: [2006] EWHC 244 (QB). Mr D’Cruz had not defended the claim and judgment had been entered against him in default.

The defendants appealed, challenging the fairness and adequacy of the judge’s credibility findings and seeking to adduce further computer evidence. The central issue was whether the trial judge’s assessment of the conflicting evidence should stand.

1. The appeal was dismissed unanimously, and the associated application to adduce further evidence was refused. May LJ gave the principal judgment; Arden LJ and Auld LJ agreed.

2. The claimants’ cause of action was that Mr Low had held Mr D’Cruz out as a solicitor or partner. It was neither fraud nor dishonesty. Accordingly, there was no requirement to plead either matter. Dishonesty became relevant only as an evidential inference in resolving the incompatible accounts, including the competing versions of the letter dated 18 January 2005. Mr Low understood the case he had to meet, and the judge applied an appropriately high standard in addressing the serious allegation.

3. The proposed fresh evidence concerning Mr Low’s home computer could not affect the result. The trial judge had placed little weight on the office-computer evidence. That evidence was inconclusive as to printing, while showing that the longer version of the letter had been edited after its stated date. The Court therefore refused admission of the further evidence.

4. The complaint that the judge had unfairly inferred that Mr Low answered a telephone call did not justify setting aside the judgment. Even if the point might have been better put in cross-examination, it could not carry an appeal against a detailed assessment supported by other evidence.

5. A possible error concerning the date and timing of cash withdrawals was not fundamental. The trial judge had compelling and unchallenged reasons for finding Mr Low’s account intrinsically implausible. Her careful assessment of the witnesses and documents was neither wrong nor unsustainable. Arden LJ added that credibility in a case involving alleged fraud is properly tested against objective facts, documents, motives and overall probabilities, following the approach stated in Armagas v Mundogas, [1985] 1 Lloyd’s Reports.

• Court of Appeal (Civil Division): In [2007] EWCA Civ 319, dismissed the defendants’ appeal and refused their application to adduce further evidence.
• High Court of Justice, Queen’s Bench Division (Dobbs J): On 31 July 2006, in [2006] EWHC 244 (QB), entered judgment for the claimants for £23,500 plus interest.