Dansingani & Anor v Canara Bank

Delay in delivering judgment, however inordinate and inexcusable, does not by itself justify allowing an appeal. A lengthy delay nevertheless requires the appellate court to review the evidence, findings and reasoning with special care.

A judgment must demonstrate that the essential issues were addressed. Where the case turns substantially on contested oral evidence, it must address the principal challenges to the credibility of a material witness. Credibility should be assessed against contemporaneous documents, independently proved facts, the witnesses’ motives and the overall probabilities.

A bank obtained judgment against a company for loans repayable on demand and against its managing director under a guarantee. The defendants alleged that the bank’s chairman had promised open-ended financial support in return for a mortgage and had said that inconsistent formal documents could be ignored.

After a 14-day trial, the judge rejected those allegations and entered judgment for JPY 306,659,521. His judgment was provided in draft about 34 months after trial. The defendants appealed from the decision reported as [2019] EWHC 3439 (Ch), seeking a retrial.

The central issues were whether the delay itself rendered the decision unjust and whether the judge had failed properly and even-handedly to evaluate the documentary and oral evidence.

1. Appeal dismissed unanimously. Inordinate and inexcusable delay in delivering a judgment is not, by itself, a ground for allowing an appeal. Where there has been lengthy delay, the appellate court must exercise special care when reviewing the evidence, the trial judge’s treatment of it, the findings of fact and the reasoning. The trial judge had a complete transcript and extensive written materials, and there was no basis for suggesting that the delay had impaired his recollection: [2020] EWCA Civ 408, [2021] UKPC 6 and [2021] EWCA Civ 680 applied.

2. The judgment adequately addressed the essential issues and the principal attacks on the witnesses’ credibility. The judge tested oral recollections against contemporaneous documents, inherent probabilities and the witnesses’ motives. That was the proper approach identified in [2013] EWHC 3560 (Comm) and The Ocean Frost [1985] 1 Lloyd’s Rep 1.

3. The circumstances differed materially from Harb v Aziz [2016] EWCA Civ 556, where important credibility challenges and issues had not been addressed and a retrial was required. Here the judge recorded and resolved the principal criticisms of the bank’s witnesses and gave extensive, sound reasons for rejecting the evidence of the managing director and his associate.

4. The inherent improbability of the alleged assurances was assessed in its full context. The bank’s desire for additional security did not make it likely that its chairman would promise indefinite and unlimited lending or permit formal documents to be ignored. The contemporaneous records showed that the company had sought short-term support, had agreed in principle to provide a second charge and remained subject to limited, conditional facilities.

5. The alleged regulatory conspiracy lacked evidential support. The branch possessed emergency authority to increase the facility, remained in close communication with head office and had previously reported excess borrowing. The judge’s favourable findings concerning the bank’s treatment of the director’s wife did not undermine his findings against the appellants; instead, they demonstrated an even-handed assessment.

6. Although the delay constituted a serious dereliction of the judicial duty to give judgment promptly, the appellate court’s function was to do justice between the parties rather than sanction the judge. The findings were not merely safe: the Court of Appeal was convinced that they were correct.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court upheld the judgment against the company and its managing director: [2021] EWCA Civ 714.

2. High Court, Business and Property Courts, Business List (Chancery Division): His Honour Judge Dight CBE, sitting as a High Court judge, entered judgment for the bank against the company and its managing director for JPY 306,659,521. He dismissed the bank’s claims against the director’s wife and for possession of the matrimonial home, and dismissed the defendants’ counterclaims: [2019] EWHC 3439 (Ch).