Aldermore Bank plc v Roderick John Lynch & Anor

An appellate court should not retry factual disputes or substitute its assessment of witnesses and documents merely because it might have reached a different conclusion. Intervention is justified where the trial judge misunderstood material evidence, failed to consider relevant evidence or inherent probabilities, or reached a conclusion that no reasonable judge could support. In a forgery case, contemporaneous documents, motives and overall probabilities remain important safeguards when assessing witness evidence. On an appeal concerning a proof of debt, the creditor bears the persuasive burden of proving the debt and any guarantee. If prima facie evidence of authenticity is produced, the evidential burden may shift to the debtor alleging forgery, although the persuasive burden remains unchanged.

Aldermore Bank appealed against an order made by Chief Insolvency and Companies Court Judge Briggs on 23 February 2021. The order reversed the trustee in bankruptcy’s admission of the Bank’s proof of debt, which was based on an alleged personal guarantee signed by Roderick Lynch in respect of debts of Ruskin Private Hire Ltd.

The trial judge found that the guarantee had not been sent or taken to Ruskin’s offices and that neither Mr Lynch nor the apparent witness, Ms Hughes, had signed it. The Bank challenged the judge’s treatment of handwriting evidence, documentary evidence, inherent probabilities, procedural matters and the burden of proof. The central issue was whether the factual findings could stand on appeal and, if not, what order should follow.

1. Appeal allowed. The appeal court could not substitute a finding that the guarantee was valid or determine who signed it. The case required a retrial.

2. The judge had materially misunderstood the handwriting expert’s report. The expert expressed a strong opinion that Mr Lynch’s signature was simulated, but an absolute or conclusive opinion that Ms Hughes wrote the witness name and address. The trial judge treated the qualification concerning the limited comparison material as applying generally, and relied on Ms Hughes’s evidence to reject the expert’s separate conclusion about her handwriting. That error was potentially significant because it undermined the finding that the document had never left the Bank.

3. The judge was entitled to evaluate the oral and documentary evidence together. The Bank’s internal documents were admissible, but they were incomplete and unexplained. The judge could conclude that they did not establish delivery of the guarantee or justify the inferences sought by the Bank. The similar-fact material concerning Mr Lynch’s other allegations was also properly treated with caution because the alleged earlier misconduct had not been proved.

4. However, the judge failed to test his conclusion by reference to motive and inherent probability. A finding that an employee of a reputable bank had forged the guarantee was serious. The judge should have considered why such a forgery would have occurred within the short period before the document was uploaded, and whether someone on the Ruskin side might instead have signed it. The omission rendered the decision flawed, although it did not establish that the opposite conclusion was inevitable.

5. On an appeal concerning an office-holder’s decision on a proof of debt, the creditor bears the persuasive burden of proving the debt and the guarantee. Where the debtor’s only real defence is forgery, prima facie evidence of authenticity may shift the evidential burden to the debtor, without shifting the persuasive burden.

• Chancery Appeals: Aldermore Bank appealed against the order of Chief Insolvency and Companies Court Judge Briggs dated 23 February 2021. The appeal was allowed and the matter was directed towards a retrial.