Nuttal & Anor v Kerr & Anor

A serious delay in delivering judgment does not automatically invalidate the decision or require a retrial. The appellate court must scrutinise the findings with special care. A retrial is justified only where the appellant identifies a material error in the judge’s recollection of the evidence, attributable to the delay, and the appellate court cannot remain satisfied that the correct conclusion was reached.

A witness’s exaggeration need not be characterised as deliberate lying before it can affect credibility. Even an established lie does not require rejection of all the witness’s evidence. Credibility remains a matter for assessment against contemporaneous documents, consistency and the overall probabilities. A fraudulent misrepresentation need only play a real and substantial part in inducing a transaction; it need not be the sole inducement.

The Applicants appealed against a judgment of HH Judge Hand QC dated 14 March 2018. The underlying claim concerned alleged fraudulent misrepresentations inducing the Claimants to acquire a 10% interest in Sports Management Group Ltd for £500,000. The judge found several fraudulent misrepresentations, held that they induced the agreement, and ordered rescission with repayment of £50,000 and interest.

The appeal was heard as a rolled-up application for permission to appeal and, if permission were granted, for remission for a retrial. The Applicants relied principally on the 18-month delay in judgment and alleged that the judge had wrongly characterised Ms Kerr’s evidence about her ability to provide the investment funds. The central issue was whether the delay had caused a material error of recollection requiring a retrial.

1. Appeal dismissed. Permission to appeal was granted because the delay required appellate scrutiny, but no retrial was ordered.
2. The 18-month delay was inordinate, regrettable and required special care in reviewing the evidence. The applicable approach was that stated in Bond v Dunster Properties Ltd and others [2011] EWCA Civ 455. A delayed judgment does not automatically invalidate the decision. The appellate court must ask whether there was a material point on which the judge’s recollection was at fault and, if so, whether it can still be satisfied that the correct conclusion was reached.
3. The challenge to the description of Ms Kerr’s evidence as exaggerated failed. That characterisation was open to the trial judge and reflected a finding that her evidence had a kernel of truth but was unreliable and unattractive. Even if the judge had treated the evidence as a lie, he had taken it into account in assessing credibility. One lie does not require the rejection of the remainder of a witness’s evidence, particularly where other evidence is corroborated by contemporaneous documents.
4. The trial judge’s conclusions were materially supported by documentary evidence and by inconsistencies in the Applicants’ evidence. The findings concerning the principal representation about SMG’s valuation did not depend upon accepting Ms Kerr’s oral evidence.
5. The law on inducement was correctly applied. A representation likely to influence a reasonable person is presumed to have induced the transaction unless the representor shows that it played no real and substantial part. The representation need not be the sole inducement. The valuation representation was fraudulent, was actively present in the Claimants’ minds, and independently justified rescission. The trial judge’s conclusion that the Claimants were entitled to rescind and recover £50,000 with interest was therefore correct.

• High Court (Queen's Bench Division): appeal from the judgment of HH Judge Hand QC dated 14 March 2018. The appeal was dismissed and the underlying findings and relief were upheld.