Riva Bella SA v Tamsen Yachts GmbH

Where the evidence does not enable a tribunal rationally to decide an issue, the burden of proof remains operative. The judge may conclude that the party bearing it has failed to prove the case. A trial judge need not recite every piece of evidence, but must give reasons sufficient to explain the conclusion and why the losing party lost. An appellate court must exercise particular caution before interfering with factual evaluations, especially where the judge heard expert evidence and the issue depends on technical inferences. The possibility that another conclusion could have been reached does not justify substituting it on appeal. Where breach is not established, a consequential valuation issue need not be determined.

The appellant buyer challenged findings made by Eder J in the Commercial Court concerning a yacht’s warranted top speed and the alleged diminution in its value. The judge found that the yacht could not achieve 30 knots, but that the buyer had not proved that it could not achieve 27 knots. He also held that any diminution in value could not be quantified without knowing the precise shortfall.

Permission to appeal was refused on the papers. The buyer renewed the application, seeking to challenge those factual conclusions and to establish that the yacht’s maximum speed was no more than 19 or 20 knots at light displacement. The central issue was whether there was a real prospect that the Court of Appeal would interfere with the trial judge’s evaluation of the evidence.

The renewed application for permission to appeal was refused.

1. The trial judge was entitled to conclude that the buyer had failed to prove that the yacht was incapable of achieving 27 knots. Where the evidence is too unsatisfactory to permit a rational conclusion, the burden of proof remains relevant. A judge may therefore find that the party bearing the burden has failed to discharge it, as explained in Verlander v Devon Waste Management [2007] EWCA Civ 835 and Rhesa Shipping Co SA v Edmunds, The Popi M [1985] 1 WLR 948.
2. The judge was not required to set out every item of evidence, including evidence concerning the yacht’s sister ship. His function was to reach conclusions and give reasons sufficient to explain his view and why the losing party lost. That approach was consistent with Bekoe v Brooms [2005] UKPC 39.
3. An appellate court should be very cautious before interfering with a trial judge’s evaluation of evidence, particularly where the judge heard expert evidence and the conclusion depended on technical inferences from proven facts. The fact that a different judge could have reached a different conclusion did not justify substitution. The reasoning in Biogen v Medeva [1997] RPC 1 supported that restraint.
4. There was no real prospect that the Court of Appeal would replace the judge’s findings with a positive finding that the yacht’s maximum speed was only 19 or 20 knots. Since the buyer accepted that the quantum issue depended on proving breach of warranty, that issue did not arise.

• Court of Appeal (Civil Division): Longmore LJ refused permission to appeal on the papers. Lewison LJ refused the renewed application.
• High Court of Justice, Queen’s Bench Division, Commercial Court: Eder J found that the buyer had not proved the relevant shortfall from the warranted speed and held that diminution in value could not be quantified on the evidence.