Grunwick Processing Lab Ltd v Perera

A court may draw an inference from circumstantial evidence where the physical facts identify a ready source, alternative explanations have been rejected, and the inference accords with common sense. Direct evidence of the precise mechanism is unnecessary, and a judge need not resolve ancillary issues where the burden of proof has been discharged on the central issue. The absence of records showing loss is not decisive. Appellate courts should generally respect robust case-management decisions, including refusal of interest where a party had ample opportunity to provide supporting figures but failed to do so.

Mr Perera had been employed by Grunwick for about 20 years. Grunwick alleged that he had stolen silver flake produced at its photographic-processing factory and supplied it to Mr Dhanak, a jeweller. The High Court found that the silver was silver flake, that Mr Perera had stolen it from Grunwick, and that Grunwick was entitled to damages. In related proceedings, Mr Perera obtained judgment for £160,000 against Mr Dhanak’s estate, but the judge refused interest because no figures had been provided.

Mr Perera appealed on the theft finding and on the refusal of interest. The central issues were whether the evidence permitted the finding of theft despite the absence of records or direct evidence of the means of removal, and whether the refusal of interest was a proper case-management decision.

Both appeals were dismissed. Lord Neuberger delivered the judgment, with Longmore LJ and Sullivan LJ agreeing.

1. The court applied the approach discussed in Rhesa Shipping Company SA v Edmunds [1985] 1 WLR 948. A judge is not always required to choose an explanation where the burden of proof has not been discharged. The Sherlock Holmes-style inference is appropriate only where the other conceivable explanations can confidently be rejected and one explanation remains. Common sense is also essential.
2. The High Court was entitled to find that Mr Perera had stolen the silver. Silver flake could only have been produced by electrolysis. Mr Perera’s alternative explanations had been withdrawn or rejected, and Grunwick’s factory was the only source he had come close to identifying. The absence of a recorded loss did not prevent the finding because the records would not necessarily have detected the removal and the quantity represented only about 4 per cent of production. The judge was also entitled to leave unresolved whether Mr McGredy was involved and precisely how the silver was removed.
3. The court noted that Rhesa Shipping had been considered and distinguished in Datec Electronic Holdings Limited v United Parcel Services Limited [2007] 1 WLR 1325 and Ide v ATB Sales Ltd [2008] PIQR 35. It adopted, with appropriate amendments, the reasoning in Do-Buy 925 Ltd v National Westminster Bank Plc [2010] EWHC 2862 (QB) concerning inferential fact-finding.
4. The refusal of interest was a robust case-management decision which the appellate court should generally support. Mr Perera had more than two months to provide figures and supplied none. The alleged inconsistency with the later treatment of Grunwick’s interest claim did not justify intervention. The point had not been raised below and was too late on appeal.

Order: appeal dismissed.

• Court of Appeal (Civil Division): dismissed Mr Perera’s appeals concerning the finding of theft and the refusal of interest.
• High Court, Queen’s Bench Division: Mr Nicholas Strauss QC, sitting as a deputy judge, found that Mr Perera had stolen silver from Grunwick, awarded Grunwick damages, awarded Mr Perera £160,000 against Mr Dhanak’s estate, and refused interest on that award.