Prebble v Costa

An appellate court should not interfere with factual findings based substantially on witness assessment unless the findings are plainly wrong. In an oral-contract case, documentary evidence and inherent probabilities remain relevant, but unusual circumstances may make ordinary commercial probabilities an unreliable guide. The appeal court must assess whether the findings are contradicted by the documents, the inherent probabilities or admissible fresh evidence. Fresh evidence will not justify intervention unless it satisfies the applicable principles and would probably have an important influence on the result.

The claimant lent £70,000 in connection with the occupation of a property owned by the defendant. The claimant said that the defendant had borrowed the money and was obliged to repay it when the property was sold. The defendant maintained that the money had been lent to the claimant’s son-in-law, paid to or for the defendant’s benefit, and represented rent or a deposit towards a proposed purchase.

After hearing the witnesses, the Croydon County Court found for the claimant. The defendant appealed, challenging the factual findings by reference to the documents, inherent probabilities and fresh evidence concerning the proposed purchaser’s ability to obtain a mortgage. The central issue was whether the trial judge was plainly wrong.

1. Appeal dismissed. The appeal concerned factual findings in a case turning on the formation of an oral agreement and the reliability of witnesses. The relevant question was whether the trial judge’s conclusion was plainly wrong in light of the documentary evidence, the inherent probabilities or the fresh evidence.
2. The absence of contemporaneous documentation did not undermine the claimant’s account. The later correspondence, read as a whole, was capable of supporting the finding that the £70,000 was a loan to the defendant, repayable by him, while also explaining the claimant’s willingness to allow a deduction reflecting the Tappings’ occupation of the property.
3. Inherent probabilities can assist in determining the terms of an oral agreement, but their value depends on the circumstances. Where the transaction and the parties’ situations are unusual, ordinary assumptions about what normally happens may provide little assistance. Several features nevertheless supported the trial judge’s conclusion, including the defendant’s failure to account to the Tappings or demand rent.
4. The application to admit fresh evidence under CPR 52.11(2) failed. Applying the principles in Ladd v Marshal [1954] 1 WLR 1489, the documents showed attempts to obtain mortgage finance but did not probably influence the result. They did not establish that the Tappings could honestly have raised the sum required to purchase the property and did not determine what had been agreed in March or April 2005.
5. The judge’s interventions and approach to the defendant’s evidence were robust and heavy-handed. They did not establish a ground of appeal, particularly since unfairness was not alleged.

• Croydon County Court: Her Honour Judge Baucher found that the defendant had entered into an oral loan agreement with the claimant for £70,000, repayable on the sale of the property.
• Court of Appeal (Civil Division): The appeal against the factual findings was dismissed.