Hurndell v Hozier & Anor

Fresh evidence that materially undermines a central credibility finding may require a retrial where that finding materially contributed to the trial decision. A retrial is appropriate where the evidence has not been tested by cross-examination and the appellate court cannot safely determine the merits. Excessive delay in delivering judgment does not itself make a judgment unsafe. The appellant must show a fair basis for believing that errors were probably or possibly attributable to the delay. In fraud or forgery disputes, credibility should be tested against objective facts, documents, motives and overall probabilities.

The appellant claimed that he beneficially owned approximately 4.99% of the shares in Stanelco plc and that the first respondent had unauthorisedly transferred most of them to companies connected with the second respondent. The respondents contended that the appellant had held the shares only as nominee for Mr White and had authorised the later transfers.

David Richards J dismissed the claim after finding that the appellant was a nominee and that a handwritten note signed in St Tropez supported the respondents’ case. The appellant appealed, relying on delay in delivery of judgment, alleged errors in the factual findings and fresh evidence concerning the St Tropez meeting and the note. The central questions were whether the fresh evidence made the trial judgment unsafe and whether the case should be retried.

1. Disposition. By a majority, Pill LJ and Lloyd LJ allowed the appeal and remitted the case for retrial in the Chancery Division. The Chancellor would have dismissed the appeal.
2. Fresh evidence. The court unanimously admitted evidence from Lisa Panter, Sally Bullimore-Pyne, Lionel Blye and Madame Marino. It rejected further documents exhibited to Mr Davis’s statement and Mr Quinlan’s statement because they could have been adduced at trial and would not have materially influenced the result. The admitted evidence had not been tested by cross-examination. Its proper effect was therefore a question for a retrial, rather than a basis for judgment for the appellant.
3. Majority reasoning. Pill LJ considered that the evidence seriously undermined the finding that the St Tropez meeting occurred and that the note was genuine. That finding was of central importance to the trial judge’s assessment of credibility and his conclusion that the shares had been held as nominee. The issue of Mr White’s intention could not safely be isolated from those interconnected factual findings. Lloyd LJ agreed that the judgment could not stand once the admitted evidence placed the central finding in serious doubt.
4. Delay. The eight-month delay in delivering judgment was excessive, but it did not establish that the judgment was unsafe. The Chancellor applied the guidance in Rolled Steel Products v British Steel Corporation [1986] Ch. 246 and Cobham v Frett [2001] 1 WLR 1775. The appellant failed to show that the alleged errors were probably or possibly attributable to the delay.
5. Credibility. Pill LJ treated the guidance in The Ocean Frost [1985] 1 Lloyds LR as helpful. In cases involving alleged fraud or forgery, evidence should be tested against independently established facts, documents, motives and overall probabilities. The retrial would allow those matters and the competing credibility issues to be reconsidered.
6. Dissent. The Chancellor considered that the appellant bore the burden of proving a beneficial gift and that the evidence did not establish Mr White’s donative intention or authority to give away the shares. On that approach, the fresh evidence did not affect the result and the appeal should have been dismissed.

• Court of Appeal (Civil Division): On 12 February 2009, by a majority, allowed the appeal and ordered a retrial. The court admitted some fresh evidence and rejected other evidence.
• High Court, Chancery Division: David Richards J dismissed the claim after trial in a judgment handed down on 19 March 2008. Permission to appeal was refused on 11 April 2008.