Williams Motors (CWMDU) Ltd v Powys County Council

On a renewed application for permission to appeal, a serious finding of fraud by recklessness may be arguable where the trial judge has not sufficiently analysed the defendant’s state of mind and the findings may instead indicate inefficiency rather than indifference to truth or falsity. Permission may be limited to that issue without deciding the merits. A challenge to misfeasance in public office has no realistic prospect where the trial judge expressly found that the necessary degree of knowledge was not proved and alleged non-disclosure could not affect that conclusion.

A small coach company brought claims for breach of contract and misfeasance in public office after a county council terminated its school transport contracts. The High Court dismissed both claims. Permission to appeal was refused on the papers, and the company renewed its application before the Court of Appeal.

The application challenged the findings that the council officer lacked the knowledge required for misfeasance and that the company director had acted fraudulently by recklessness. The central issue was whether either challenge disclosed a properly arguable ground with a realistic prospect of success.

1. Disposition. The renewed application was granted only in relation to the first ground, concerning the finding of fraud by recklessness. Grounds two and three, concerning misfeasance in public office and alleged non-disclosure, were rejected. The court did not determine whether the permitted appeal would ultimately succeed.
2. Misfeasance. The claim relied on the second form of misfeasance identified in the Three Rivers case, requiring a public officer to act knowing that he had no power to act and that his conduct would probably injure the claimant: [2001] UKHL 16. Although the officer’s investigation had been inadequate, the trial judge expressly found that the necessary degree of knowledge had not been established. There was no prospect of successfully challenging that conclusion.
3. The complaint about missing documents did not materially improve the position. The company had not sought an adjournment or other remedy at trial. The trial judge had heard the officer’s evidence, considered the relevant documents, and reached a conclusion which the alleged non-disclosure could not realistically alter.
4. Fraud by recklessness. The trial judge had rejected actual knowledge but found that the company director had been reckless to a sufficient degree as to whether the certifications were true or false. Given the seriousness of that finding, and findings suggesting inefficiency rather than indifference to truth or falsity, the adequacy of the state-of-mind analysis was properly arguable. Permission was therefore granted to that limited extent.

1. Court of Appeal (Civil Division) — On 22 November 2012, Sir David Keene granted the renewed application for permission to appeal to the limited extent of ground one: [2012] EWCA Civ 1892.
2. High Court of Justice, Queen’s Bench Division, Cardiff District Registry Mercantile Court — HHJ Jarman QC dismissed the claims.
3. Permission stage — Tomlinson LJ refused permission to appeal on the papers. The application was subsequently renewed.