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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Banks & Anor v Cox & Anor [2001] EWCA Civ 492 (3 April 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/492.html Cite as: [2001] EWCA Civ 492

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(Mr Justice Lawrence Collins)

		Royal Courts of Justice Strand London WC2 Tuesday, 3rd April 2001

Tuesday 3rd April 2001

1. LORD JUSTICE SEDLEY: This is an application for permission to appeal against a decision of Lawrence Collins J given in favour of the claimants, Mr and Mrs Banks, on 21st December 2000. The judgment was given at the end of the retrial of an action concerning the transfer of a nursing and care home in Devon. At the conclusion of the original trial, on 17th April 2000, Lloyd J had found for the defendants, Mr and Mrs Cox. Mr and Mrs Banks, however, had secured a retrial on appeal to this court on the ground of newly discovered evidence.
2. Pending the assessment of damages for the fraudulent misrepresentation which Lawrence Collins J found on the retrial had induced the claimants to buy the business and take a lease of the premises from the defendants, the defendants' assets are frozen. The home, as I understand it, is making losses and is a serious financial burden to Mr and Mrs Banks. The entire case has been a source of enormous distress to both couples, and it is not over yet.
3. The defendants now seek permission to appeal on grounds set out with care and lucidity in a home made skeleton argument from which lawyers could well learn. Their grounds for seeking permission to appeal fall into four sections.
4. I will come to the first section last.
5. The second section, which concerns last minute difficulties of representation at the retrial, was a matter for the judge, Lawrence Collins J, to the extent that these were raised at all. There is no evidence that they were dealt with, so far as they were dealt with, erroneously, and they afford in my judgment no viable ground of appeal. Counsel, though instructed late, was clearly in command of his brief and Mr Cox, though suffering from stress, was able to give his evidence intelligibly.
6. The third section of the skeleton argument is a criticism of the judge for having at the retrial misapprehended the facts in a number of respects. These all rely, to a greater or lesser extent, upon fresh evidence which Mr and Mrs Cox now seek permission to adduce. The evidence and argument under the various subheads of this section might well be of interest if there were to be a second retrial. But, with one exception, it seems to me that no good ground is shown for admitting these matters as the basis of a retrial. The one exception is the contents of section 3(a). While one can differentiate between them in relation to their potential force, for reasons that have mainly to do with my conclusion on the first section, to which I shall come, it seems to me that these ought to go, along with section 1, before the full court. The rest of section three may be capable of reargument, but only if the book is not otherwise closed.
7. The fourth section of the skeleton argument is a challenge to this court's order for a retrial. Once again, if a further retrial is in the event ordered, the issues raised under this head might go to the claimants' credit. But they cannot now be used to wind the clock back to a point before the retrial was ordered; something of much more fundamental significance would be required for that.
8. This brings me to the first section of the skeleton argument.
9. At the retrial the judge concluded, in essence, that the defendants had received a letter from the local authority warning of imminent cuts in the budget on which this home, like other homes, relied critically for its income; that the failure to disclose this when responding to a written enquiry before contract was deliberate or, if not deliberate, negligent; and that but for it the claimants would not have bought the business or taken the lease. The defendants, it has to be said, were not assisted by their denial of any recollection of having received the local authority's letter. The judge's rejection of their denial must have made their next contention, that the letter was in any case of no real consequence, harder to sustain. But a further element in the judge's reasoning was his scepticism at the defendants' account of having had the home on the market a year or more before they sold it to the claimants. This scepticism certainly fortified him in his view that the local authority letter was so significant that it was what had prompted the defendants to sell up.
10. The defendants now say that they have evidential material to confirm that they had indeed had the home on the market in 1995-1996. At present the evidence is in exiguous form, but it is not intrinsically unbelievable. It takes the form of an undated manual estate agent's record and a not very explicit manuscript note from an alleged potential purchaser. Both of these, if they are to form the basis of an application to admit fresh evidence, need at the very least to be in complete form so that, if believed, they would amount on their face to proof of something capable of changing the main run of the case. Secondly, they need to be shown by the defendants to have been unavailable by the exercise of due diligence in time for the retrial. The same is true of evidence which they now wish to adduce that they had instructed agents in 1997 just before the local authority letter went out.
11. The defendants also say that they have new evidence which explains why Mrs Cox's name appears on minutes of a meeting which she did not attend. This document counted against her at trial, where it caused the judge to disbelieve her denial that she had been present. The Chairman, Mr Woods, who wrote her name on the minutes has now, it appears, told the defendants that it was probably he who typed the minutes, that he would not have done this had Mrs Cox, who was the honorary secretary, been present at the meeting and that the reason he added her name in manuscript was probably simply because this was the copy being circulated to her. Since Mr Woods was a witness at the retrial, there may be very great difficulty in establishing the admissibility of new evidence of any kind from him at this stage. At the moment, there is not even a statement from him.
12. To these elements of purportedly new facts I am prepared for present purposes, for the reasons I have indicated, to add those found in section 3(a). I do not suggest that all are of equal potential consequence. Plainly they are not. But at this stage I do not think it is right for me to differentiate between them.

Part (b) of section 1 of the skeleton argument is in effect an argument of law. It is that the letter, even if it had been received by the defendants, disclosed no "material change in the nature or conduct of the business" since the last accounting date. On this issue, indeed, Lloyd J had found for the defendants on the first trial; but the Court of Appeal took the view that this finding was not conclusive. Morritt LJ, at paragraph 59 of his judgment, which was the single full judgment of this court, said:

"In saying that the letter was a sign as to what was to happen in the future the judge appears to have overlooked the passages in the letter which I have quoted already to the effect that the local authority was having to take action both `immediately' and `now'. For my part I do not agree with the judge that the contents of the letter could not give rise to a misrepresentation. Counsel for Mr and Mrs Banks gave as an example the case of a business which sells all its product to a particular retailer, but without a contract for any long-term supply. If the retailer informs the producer that he is seeking an additional supplier for most of his requirements that may give rise to a change in the nature or essential quality of the business of the producer. The greater the impact on the existing business the more likely it will change its nature. The change to the nature of the business will be immediate though its consequences may not become apparent until later. If the business is built on a foundation which is withdrawn the change to the nature of the business occurs when the foundation is withdrawn even though it may take time for it to collapse. It follows that in my view the judge was wrong to find that even if the letter or its contents were known to Mrs Cox the answer to pre-contract inquiry No.20 could not have been falsified. In my view it could have been; whether or not it was can only be determined at a trial."

13. It may now be arguable in the light of his fresh findings of fact that Lawrence Collins J erred in the passage of his judgment in which, culminating at paragraph 59, he held the answer to the material enquiry to have been false. Much of his reasoning, however, already has the imprimatur of this court through the passage I have quoted from Morritt LJ as a permissible legal approach to the facts, depending on what the facts are found to be. The question may therefore now involve more fact than law. But on one view at least the legal ambit of the inquiry may be considered to be such as to require quite strong facts to put the defendants in breach: hence the possible relevance of the proposed new evidence.

Part (c) of section 1 of the skeleton argument relates to matters of quantum. It therefore has a bearing only if quantum continues to be an issue, and then only at the trial of quantum. It has no arguable present relevance.

14. What I propose to do, having heard Mr Cox on his own and his wife's behalf and also having briefly had the advantage of hearing Mrs Banks, who has come to listen to this application, is to adjourn the application for permission to appeal (to an extent that I will in a moment indicate) to a full court to be heard upon notice to the claimants. I am doing this for two main reasons. One is to give the defendants an opportunity -- and it is likely to be their only opportunity -- to get their application and the evidence on which it is intended to be based into proper order. The other is so that, if the court decides that an appeal has, on any one or more grounds, a real prospect of success, the court may go on directly to hear and determine the appeal.
15. There is also a question of time. The applicants will have to persuade the court, in any event, to enlarge the time for seeking permission to appeal from 12th January 2001, which was the date fixed by an extension granted by Lawrence-Collins J, to 26th January, which is the date when the present application was in fact lodged. Mr Cox has said enough to me to indicate that he may well have sufficient grounds for such an extension.
16. It is, however, in relation solely to the issues identified in section 1(a) and (b) and section 3(a) of the defendant's skeleton argument that I make this order. As to the remainder of the issues in the skeleton argument, for reasons that I have now given, I refuse permission to appeal at this point because there seems to me to be no sufficient viability in them.
17. The hearing is to be expedited. The assets of the defendants are frozen. Their burden of debt is consequently mounting by the week. The claimants, equally, are in straits. Both couples badly need finality in this dispute.
18. I hope that the case will be able to come on very shortly after Easter. It should not come on any sooner because there will simply not be the time to get ready. If it is able to heard not long after Easter, the defendants should appreciate that they will have their work cut out to get the case ready in time.
19. Although Mrs Banks is present, she and her husband and their lawyers are entitled to formal service of notice of the adjourned hearing of this application for permission. That notice is to be served by you, Mr and Mrs Cox, on the Banks' solicitors by next Monday, the 9th April.
20. The judgment that I have just given is to be transcribed at public expense and will be made available to both sides as soon as it is transcribed. Mrs Banks, for her part, should not wait for service of the notice. I am sure that she will go straight to her lawyers to indicate what I have decided today, because it would certainly be wise for the Banks to be present at the adjourned hearing.
Order: As above.