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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bentley v Jones Harris & Company [2001] EWCA Civ 1724 (2 November 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1724.html Cite as: [2001] EWCA Civ 1724 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr H K Goddard QC)
Strand London WC2 |
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B e f o r e :
and
MR JUSTICE BURTON
____________________
MICHAEL BENTLEY | Claimant/Applicant | |
-v- | ||
JONES HARRIS & COMPANY | ||
Defendants/Respondents |
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Smith Bernal Reporting Limited
190 Fleet Street London EC4A 2AG
Tel: 020 7421 4040 Fax: 020 7831 8838
(Official Shorthand Writers to the Court)
Mr C Cory-Wright (instructed by Messrs Ward Hadaway, Newcastle upon Tyne) appeared on behalf of the Respondent Defendants.
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Crown Copyright ©
(i)He gave pessimistic advice as to the likely liability of the claimant on a VAT assessment which had been received in the June/July in the sum of £155,000.
(ii)He told the claimant that that VAT liability could increase to as much as £225,000.
(iii)He said that he should run down his business and sell off his assets in order to avoid the consequences of that liability.
"Permission to appeal ... limited to the issues (i) whether, in reaching the conclusion that Mr Charles Bryning did not give the advice on 3 October 1996 of which the applicant complains, the judge was entitled to rely on Mr Bryning's attendance note and, if not, (ii) whether that conclusion can stand."
"It is arguable that the judge ought not to have relied on Mr Bryning's attendance note of the meeting on 3 October 1996 in the circumstances that the attendance note was not agreed to be an accurate record of what took place and neither Mr Bryning nor any other witness was called to support its contents.
The judge gave two reasons for rejecting the applicant's own account of the meeting of 3 October 1996. One reason was the attendance note; the second reason was that he did not accept the applicant's evidence. It is arguable that, if the first reason is flawed, the judge might not have reached the conclusion that he did on the second reason alone.
I am satisfied that there is no real prospect of success in relation to the other issues on which the judge held against the applicant. The judge was plainly entitled to hold that the applicant had not made out his case on his own evidence; and was not bound to allow the trial to proceed so as to give the applicant an opportunity of making his case through the cross-examination of the defendants' witnesses."
(1)The claimant was claiming, or claimed in the course of cross-examination, that all the attendance notes, or all the material attendance notes, were manufactured or fabricated, not just that of 3rd October.
(2)There was no challenge to the authenticity of the documents when they were included in the defendants' list of documents served at a time when the claimant was represented by solicitors. By Part 32.19 of the CPR it is provided that:
"(1) A party shall be deemed to admit the authenticity of a document disclosed to him under Part 31 ... unless he serves notice that he wishes the document to be proved at trial.
(2) A notice to prove a document must be served -
(a)by the latest date for serving witness statements; or
(b)within 7 days of disclosure of the document, whichever is the later."
"This rule differs from its predecessors in that now a party will be deemed to admit the authenticity of documents disclosed to him unless he serves notice that he wishes the document to be proved at trial. (It is not incumbent on the disclosing party to seek an admission of authenticity.)"
(3)The claimant's then counsel agreed a chronology for the trial shortly prior to its start. That chronology included a resume of the contents of at least three of the relevant attendance notes. One was an attendance note of the meeting of 3rd October 1996. There is a quotation of that attendance note in the chronology which concludes with the following words:
"VAT case - how is it going - received assessment. [Arthur Andersen] dealing with it - very confident of having it withdrawn. Done well with other car dealers."
"[Bentley] said probably not an issue anyway since [Arthur Andersen] confident of winning case ..."
"[Bentley] said that he had been told a provision should have already been made. [Bryning] said that the VAT was under dispute and [Arthur Andersen] had always maintained that they would win the case, so without quantifying liability it would have been inappropriate."
"The claimant agrees the:
(a)Dramatis Personae ...
(b)Chronology, subject to determination by the Court of disputed events - e.g. [the claimant] does not accept that David Rollinson expressed any concerns about his treatment of extras ... at the end of 1992, or at any time."
(4)The claimant's attack on the attendance notes emerged unheralded by any correspondence, or by his counsel's opening, or by anything he said in examination-in-chief. I deal with how it emerged by reference to the transcripts. On the second day of the hearing he was addressing, in cross-examination, not the attendance note of 3rd October, to which I have already referred, but an attendance note relating to a meeting between him and Mr Bryning of 5th March 1996. He was asked about the contents of that attendance note by Mr Cory-Wright, counsel for the defendants. There were the following questions and answers (p.47B):
"Q.Now that is an accurate record, not obviously wholly accurate in that it records everything that was said, but that was an accurate summary of what was discussed between you and Mr Bryning on the 8th of March of 1996?"
"... this attendance note, there is no reason to think that it is other than a genuine attendance note?"
"No, there is no suggestion, there has never been any suggestion as to that about any of these attendance [notes]."
"No, sir, I did not."
"You did not say that? So he has made that up then? It is just a figment of his imagination, you would like to sell?"
"I don't know how I am allowed to phrase it."
"You can put it any way you like."
"Well, I would phrase it that along with a lot of his other notes, they have been embroidered to fit the circumstances."
"Q.Are you suggesting that Mr Bryning has created these attendance notes after the event, long after the event in order to suit the defendant's case?"
"You told us yesterday that some time between September and November there was a stalling of the negotiations with Enterprise [the potential purchasers of Vicarage Lane] ... It is clear from this note, is it not, that at this stage, whenever it was in November that this conversation took place, Enterprise were still or you were still considering the lease to Enterprise."
"With respect, sir, I don't agree with any, well with most of these notes, because I think most of these notes have been manufactured."
"Q.That is your case, right?
A.That's my case.
Q.So your case now is that, your opinion is that these notes have been manufactured to fit the case?
A.Yes, sir."
"Q.He was the financial adviser who actually put you in touch with the Yorkshire Bank?
A.Mr Bryning's friend, yes, sir. ...
Q.You say Mr Bryning's friend. Are you suggesting that this attendance note too is false?
A.I would think it wouldn't surprise me at all.
Q.It would not surprise you?
A.No."
"Have you any reason to think it was not dictated immediately following the meeting?"
"Mr Bentley said to me that he thought it could well have been tailored to suit the defendant's case. Well, it is one of many handwritten memoranda which are before me, and I totally reject any suggestion that this has been brought into existence for the sole purpose of defeating Mr Bentley's claim. There is nothing whatsoever to justify such a finding."
"... I find that he in fact in relation to the manner in which he conducted his business after October 1996 did this primarily following his own approach to what was in his best business interests, although I accept that of course he was put in touch with financial advisers and [there is] one memorandum, which is not again particularly helpful to his case. This is from Gary Roberts. Again Mr Bentley's comment in relation to that memorandum was `Well, he is a friend of Mr Bryning's.' In other words, this was a self-serving document to bolster the defendant's case, and I reject that suggestion."
"On behalf of the defendants, Mr Cory-Wright accepts that if that advice were given in the terms described by Mr Bentley and given in evidence, then his clients, Mr Bryning on behalf of his clients, would have been negligent. At this stage of course I have not heard Mr Bryning's account, although of course I have seen his statement and his case has been put to Mr Bentley in cross-examination. I have to consider whether Mr Bentley's evidence which he gave before me should be accepted at face value, and whether I should accept everything he says in relation to the nature of the advice which he contends was given to him by Mr Bryning. What I and any judge makes of a witness depends essentially on how he presents in the witness box and how he responds to cross-examination, and how that evidence is consistent with any documentary evidence which is relevant to the issue."
"Q.Your evidence now today is that the perception that you had [that is, from Mr Bryning at that meeting] about £225,000 included the risks in relation to Income Tax?
A.No, sir, that was purely the VAT risk."
"Well, the difference between £155,000 and ... over £200,000 [was] because of the Income Tax that would be going with it."
"Well, there is a newer one, aspect. Is it pleaded ... about Income Tax?"
"I am only trying to explain the conversation that I had. ... I am not telling lies to the court."
(5)After the meeting when the defendants, through Mr Bryning, allegedly advised that the liability of £155,000 was likely to increase to £225,000, the claimant made no contact with Arthur Andersen, who were actually dealing with this, to see if this advice had any substance. He was asked about this by Mr Cory-Wright in the following terms (Day 2, p.93):
"Q.Mr Bentley, you went away from that meeting on the 3rd of October with the figure of £225,000 ringing in your ears, is that right?
A.Yes, sir.
Q.Arthur Andersen were in fact dealing with the VAT assessment. Did you get in touch with Mr Ruffles and say `I have just been to see my accountant. I know he is not dealing with my VAT now, but the firm had been dealing with it before on my behalf. I am terrified. He has told me I might actually have to go down to £225,000.'? ...
A.I can't say that I did.
Q.You do not remember doing so and you do not think you did?
A.No."
"Now if Mr Bentley is correct, and he says that this figure was put forward as a likely, indeed it was a worst case scenario, but that it was one which he ought to take account of and he ought to arrange his affairs accordingly. If that was put forward by Mr Bryning, then I find it quite extraordinary that Mr Bentley, who had retained the services of experts in this field, namely Arthur Andersen, and who had up to that time obtained optimistic comments from Arthur Andersen in relation to Mr Bentley's ultimate liability for Value Added Tax, I am surprised that he did not immediately get in touch with them and say `Well, my accountant Mr Bryning who I have known for 20 years or more, he tells me that I could be looking at a bill of £225,000. Now what do you say to that?' Apparently he did not do that, and I find it quite extraordinary that Mr Bentley would be prepared to drastically re-arrange his affairs on the say-so of Mr Bryning, who at that time was not specifically advising him on his VAT liability."
(a)that the negotiation for the sale of the lease of his premises at Vicarage Lane had begun before the meeting of 3rd October (see Day 2, pp.74B-76F); and
(b)he was still considering plans for expansion of the business, not contraction, as late as February 1997 (see Day 3, pp.29E-30A).
"I also find this: that Mr Bentley, I have had the opportunity of observing him in the witness box and hearing about him. He strikes me as being an intelligent man, a man who has been used to dealing with business at a relatively high level for a considerable number of years, a man who is well versed in dealing with banks and well versed in discussing with them how he should conduct his affairs, and he has sought to present himself in a somewhat ingenuous way ..."
"In my judgment, it would have been a complete waste of time and a waste of further costs for the matter to proceed further, but my findings, my principal findings, are that I do not, having seen Mr Bentley in the witness box, I do not accept the specific allegations he makes in relation to the October 3rd meeting, in relation to the September 1994 meeting, and I find that anything that was done there or said there in law does not amount to negligence, and I have already ruled in relation to the VAT. I am not satisfied that any specific acts of negligence at this stage have been proved against the defendant's servants or agents at that stage. In any event I am not satisfied that there is any provable damage resulting from the VAT advice."
"... I find that there is nothing to suggest that there was negligent advice which caused the events to take place which subsequently did take place."
"... I find that he in fact, in relation to the manner in which he conducted his business after October 1996, did this primarily following his own approach to what was in his best business interests ..."
"... whether the court comes to the conclusion that realistically there is no basis upon which a jury could, properly directed, find in favour of the claimant on the evidence that the claimant has adduced ..."
"In other words, that the nature of the claimant's evidence generally and in particular his credibility on matters in contention is such that your Lordship should form the view that no part of his case should succeed."
"However, there is another matter which causes me to unhesitatingly reject Mr Bentley's version of what took place on the 3rd of October, and that is the attendance note. Admittedly it is an attendance note prepared by Mr Bryning. It is in the documents before me. To this extent it might be regarded as a self-serving document."
"... I say this of course on the basis that I have not heard Mr Bryning, I have no reason to doubt that this is other than a contemporaneous record of what took place."
"Well, that is in the attendance note, and I reject Mr Bentley's evidence that Mr Bryning gave him specific advice that his liability to VAT was likely to be in the order of £225,000 and that he should do certain things to his business because of the potential liability. I reject it for principally two reasons. One of course is the attendance note, which I found to be a contemporaneous one, and secondly this is from Mr Bentley's own evidence himself, the fact that having retained Arthur Andersen, he did not go and seek their comments on the alleged statement by Mr Bryning that the potential liability could be as much as £225,000. So in those circumstances, I find that Mr Bentley has not satisfied me at this stage that there is any evidence that Mr Bryning gave negligent advice in October 1996."