Gleave v Holder [2004] EWCA Civ 1192

Case No B2/2004/0279[2004] EWCA Civ 1192
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON CIVIL JUSTICE CENTRE
(HIS HONOUR JUDGE COWELL)
Venue Royal Courts of JusticeDate Friday, 30th July 2004
Strand
London, WC2
B E F O R E:
LORD JUSTICE POTTER
LADY JUSTICE ARDEN
JIM GLEAVE
Applicant/Defendant
-v-
JOHN HOLDER
Respondent/Claimant
(Computer-Aided Transcript of the Stenograph Notes of
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
MR A GOODMAN (instructed by Bruce Lance & Co) appeared on behalf of the Applicant
The Respondent did not appear and was not represented
J U D G M E N T
Between
GleaveAppellantHolderRespondent

LORD JUSTICE POTTER:

[1]This is an application by Mr Gleave, a well known trader in classic motorcycles, from the judgment and order of HHJ Cowell sitting at the Tunbridge Wells County Court, whereby he gave judgment for the claimant Mr Holder on his claim for fraudulent, or alternatively negligent, misrepresentation in connection with the sale of an Aermacchi motorcycle which the claimant brought at an auction from Robert Brookes (Auctioneers) Ltd, as agents for the defendant, on 16th April 2000. By the judge's order the claimant was held entitled to rescind the sale contract and the defendant was ordered to repay to the claimant the sum of £4,705 plus £1,426.09 in respect of interest by 4.00pm on 22nd February 2004, together with the sum of £10,000 on account of costs.[2]The claimant bought the motorcycle in a hurry, and as the result of a short inspection at the auction premises on the basis of the description in the catalogue, which was as follows:
"c. 1964 Aermacchi 350cc Racing Motorcycle. Frame No~653. Engine No 653."
[3]Having heard the evidence of the parties and their witnesses, all of whom where knowledgeable about motorcycles, the judge held for the claimant on the essence of his claim as to misrepresentation. He held that the description embodied three representations which induced the claimant to purchase.(1) The description "circa 1964" put the machine into a category for racing which the claimant intended to enter, whereas its year of manufacture or assembly would not permit him to do so, it being mainly a 1970-1971 road model.(2) The matching engine and frame numbers, "No 653", indicated authenticity, ie manufacture as part of the same machine, whereas the engine was in fact a road engine with the addition of a racing clutch cover and outside flywheel made in 1970-1971.(3) The motorcycle was an authentic racing machine, when it was in fact a motorcycle consisting mainly of road parts with very few racing parts fitted.[4]The judge held that representations(1) and(2) were undoubtedly false to the knowledge of Mr Gleave. As to representation (3), the judge abstained from a clear finding in light of the uncertain scope of the description "racing machine" and hence Mr Gleave's knowledge as to its falsity.[5]In the course of a long and careful judgment, the representation upon which the judge principally concentrated was representation (1): that the motorcycle was "circa 1964". There was good reason for this.[6]Following his purchase and the doubts which he speedily developed about the machine, the claimant went to Mr Linton, an expert in Aermacchi motorcycles, being the director of a company, Cranleigh Motorcycles, which had for years specialised in the importation and sale of such motorcycles, spares and parts. Mr Linton was immediately able to tell him the reality of the position as I have recounted it. However, of vital importance to the case, he was also able to tell the claimant that he had visited Mr Gleave's premises himself to look at another machine shortly before this motorcycle was sent to auction by Mr Gleave. He saw this motorcycle and Mr Gleave told him that he had bought it from a man in Italy, it being an Alla d'Oro Aermacchi racer circa 1964, engine capacity 350cc. Mr Linton immediately observed features which belied this description, such as the road engine and road frame, front wheels, front forks, fairing tank and seat of a 1966 type and a 1971 production-type rear wheel. The road frame had been fitted with racing forks and a racing front wheel. There was also an external visible dry clutch of a type which, according to him, only started to be used in 1966. Mr Linton stated that he told Mr Gleave that the bike in his showroom was not an Alla d'Oro circa 1964 and that it was not a racing bike, as it consisted primarily of road-going parts. The immediate response of Mr Gleave was to say "Oh, we'll have to put it in the auction then". Mr Linton supplied the claimant with a witness statement to that effect and a good deal more, which evidence was accepted by the judge.[7]The judge also found that Mr Gleave was aware that the number 653 which appeared in the auction description was neither the frame number nor the engine number, but the number stamped upon each half of the crank case. That fact was admitted by the defendant in evidence, his observation and/or defence simply being that, if the claimant had been an experienced dealer, he would have realised that the numbers were crank case numbers only and meant that both halves of the crank case matched. However, that was something which the claimant did not know, being a racing enthusiast but not a dealer.[8]The judge found that, despite what Mr Linton had told Mr Gleave and despite Mr Gleave's decision as a result not to describe the motorcycle as an Alla d'Oro racer, ie a true racing machine, and despite Mr Gleave's knowledge that the number 653 simply related to the crank case numbers, he decided to sell the machine under the description set out in the auction particulars, and that in that respect he acted dishonestly, in that he knew of the falsity of what he was asserting or that he was at least reckless, ie careless whether the representation was true or false.

The judge said this:

"44. I am quite satisfied that the defendant did know of the falsity of at any rate the two matters that I have referred to as the inducements to the claimant to buy. [Those two matters were representations (1) and (2)]. One is sufficient. All I say in relation to the third, about the racing quality, is that certainly in relation to the engine he must have known it was not a racing engine. But when one has adjectives like 'racing' one must bear in mind that adjectives are not readily the stuff of which clear representations are made. "45. Finally, at one stage of the defendant's evidence he emphasised that he really had no idea which year the engine was. If I were wrong in concluding that Mr Linton did tell him that it was not circa 1964, it seems to me that to represent the vehicle, having no idea what year the engine was, as a circa 1964 was a reckless representation made by a man who was careless whether the representation was true or false, thereby itself coming within the definition of deceit in Derry v Peek 14 App Cas 337."
[10]The judge then went on to make various points as to why he preferred Mr Linton's evidence of events to the evidence of Mr Gleave before concluding:
"48. I am therefore satisfied that the defendant knew it was not a circa 1964 machine. I am also satisfied that he knew that the numbers that he had inserted were not frame or engine numbers. It is strictly speaking therefore unnecessary for me to decide anything about the terms and conditions or the signature on the form because this is a straightforward case of an action in deceit succeeding. But for full measure I think it is my duty to say something about them."
[11]In that paragraph the judge was referring to a further issue in the trial, namely whether Mr Gleave was entitled to rely on clause25.1 and25.2 of the Buyer's Conditions at Auction in order to avoid liability in respect of the false description of the motorcycle. In any event, however, the judge's finding of fraud meant, as was common ground, that the conditions could not be relied on.[12]When this application came before me on paper, there were a substantial number of grounds of appeal pleaded, which I do not propose to elaborate, although none of them appeared to me to be well-founded. However, I stated my reasons for refusal in this way:
"Of the number of points taken on this appeal, the critical points on which the defendant failed were the judge's findings of fact that the 'c1964' representation was (a) clear (b) relied on by the claimant and (c) known to be false, alternatively made recklessly (he preferred Mr Linton's evidence to that of the defendant): see paragraphs 20, 30-35 and 44 of the judgment. There is no reasonable prospect of success in my view."
[13]I did not at that stage refer, although the same comments apply, to representation (2) relating to the engine and road frame numbers.[14]In connection with the basis upon which I refused the application, we are asked to reconsider this basis for refusal on the grounds that, at the time, I had not had the benefit of seeing transcripts of argument and interlocutory judgments in relation to two issues about which complaint was made.[15]The first concerns the additional evidence of Mr Altinier, an Italian motorcycle dealer who had purchased the motorcycle in question from a private collector in the same condition as he sold it to Mr Gleave. Mr Altinier is eminent in Italian motorcycling circles and is one of Italy's top racing bike restorers. A witness statement dated 8th May 2002 had been obtained from Mr Altinier for use at the trial at which it was duly produced with Mr Altinier in attendance. That statement confirmed that the motorcycle was an Aermacchi 350cc purchased as already mentioned and sold to Mr Gleave in 1998. It stated that Mr Altinier had opened and checked the engine before sale so that he could be sure of the bike's condition and that he was sure of its history. It notably failed to deal with the description under which the bike was sold to Mr Gleave, or the description under which Mr Gleave sold it on at auction. It appeared simply to go to the issue of whether the bike could rightly be described as a racing motorcycle. In this respect, it stated that the witness's understanding of the main definition of a racing motorcycle was that it had(i) racing tyres,(ii) no lights, horn or speedo,(iii) massive breaks,(iv) a 'lie on the tank' riding position,(v) open exhaust system,(vi) dry clutch. Mr Altinier stated that he was prepared to come to court in order to give evidence of those matters.[16]I should also here record that, although Mr Altinier did not mention it, in a supplemental statement of Mr Gleave prior to trial he stated at paragraph 2:
"I was told by Mr Altinier that the bike was a 1964 bike. I have dealt with him for many years and have every reason to believe what he says is correct. I did not see it before it came from Italy, which is where Mr Altinier resides."
[17]At the outset of Mr Gleave's case, his counsel rose to indicate to the judge that there was a dispute between counsel as to whether or not he should be entitled to ask Mr Altinier one question additional to the content of his written statement, namely whether or not he told Mr Gleave that the bike was a 1964 motorcycle, as Mr Gleave had stated. It had earlier been indicated by the claimants' counsel that Mr Altinier would not be questioned on behalf of the claimant unless that particular question was permitted to be asked.[18]The claimant's counsel objected on the grounds that, with clear knowledge on the part of Mr Gleave's advisers as to the issues of the case, Mr Altinier had never been asked to add to his statement and was only now being asked to do so after he had been present at trial since the previous day and had been ensconced together with Mr Gleave in another room with every opportunity to discuss the matter. The claimant's counsel reminded the judge that he had endeavoured to put a number of additional questions to Mr Linton the previous day, to which vigorous objection had been taken on behalf of Mr Gleave. He submitted that Mr Gleave's counsel should be similarly treated. The judge duly upheld that submission. He considered that the two witnesses should stand on the same footing, there being no essential difference between the parties. As he put it:
"One party, namely the claimant, is alleging knowledge on the part of the defendant of a particular fact, and the other party is denying that knowledge."
[19]On this appeal, Mr Goodman for Mr Gleave submits that the judge should not have dealt with the matter simply on a tit-for-tat basis. The question which he wished to ask went directly to the honesty of Mr Gleave in relation to the representation as to the date of manufacture. Mr Altinier was present in court with an interpreter and there were no difficulties in his giving that evidence. The over-riding objective, Mr Goodman submits, dictated that given that the allegation was one of fraud, all evidence reasonably available and going to that issue should be admitted.[20]Mr Goodman submits that if Mr Altinier's evidence was correct and had been admitted, the judge might have found that Mr Gleave did not know his representation was false and/or might have found that he was not reckless in that respect. It was said at the time of the application by Mr Gleave's counsel that no difficulty presented to the claimant by reason of his late addition, because that could be challenged in cross-examination. Accordingly, submits Mr Goodman, the judge should have allowed in the further evidence.[21]This submission is coupled with an application that the Court of Appeal should receive and take into account new evidence from Mr Altinier on the lines of a statement now before us. In that statement, he makes clear that he sold the motorcycle to the appellant pursuant to a letter dated 12th March 1997 (which he exhibits) in which he described the bike as "my new Aermacchi 350 Alla d'Oro 1964/1965 dry clutch". Having described various pieces of equipment on it, the letter states "This bike is ready to race and in very good condition". Mr Altinier states that, having responded to various queries of Mr Gleave's then solicitors, he had signed his statement for the proceedings in the form produced for him by Mr Gleave's solicitor. He refers to the fact that at trial, Mr Gleave wanted him to confirm in the court that the motorcycle was properly described as a 1964/65 motorcycle, and says that that is "what I continue to believe". Mr Altinier again states his willingness to come to court and give evidence if asked to do so.[22]There has also been before us an attempt by Mr Goodman to introduce further evidence of Mr Altinier as an expert in respect of various matters of detail, where no such application was ever made to the judge. In this respect, Mr Goodman has referred to certain documents which apparently Mr Altinier had with him at the time that he came to the trial, but again, as I repeat, no attempt was made to introduce these documents through Mr Altinier at the time of trial and, indeed, had it been so, no doubt the judge would have turned it down on the basis that the parties had long since had a order binding upon them that there was to be a joint expert and no independent expert called on behalf of each party.[23]There are obviously considerable difficulties in the way of Mr Gleave relying upon this additional evidence in the appeal, in relation to what Mr Altinier told Mr Gleave, bearing in mind the principles in Ladd v Marshal and the lack of any satisfactory explanation as to why, with the issues clearly defined in the pleadings, the evidence now sought to be given was never sought of Mr Altinier prior to trial.[24]Equally, there are considerable difficulties in showing that the judge's exercise of discretion was wrong. However, for the purposes of this application, I am happy so to assume and to take into account de bene esse the evidence of Mr Altinier. I still do not think that it demonstrates grounds for appeal. The question which the judge had to ask himself was whether, in the light of Mr Linton's evidence and the chapter and verse which he had given to Mr Gleave when he saw him prior to the motorcycle ever being put up for auction, Mr Gleave either knew the description which he gave to the auctioneers, and which was reproduced in their catalogue, was false, or was reckless as to whether it was true or false. In this respect, it is not disputed that the judge made sweeping criticism of the nature of Mr Gleave's evidence, which is entirely unaffected by the evidence of Mr Altinier. As already recorded, Mr Gleave gave evidence before the judge at one stage that he really had no idea which year the engine of the motorcycle was. The judge elsewhere recorded his highly adverse view of Mr Gleave as a witness, stating that he regarded him as totally unreliable, coming into the category of being one of the worst ten or so witnesses he had heard over the previous eight years.[25]The judge also had before him the report of the joint expert, Mr Bladon, which went to the falsity of crucial representations (1) to (3). As the judge put it:
"He gives his conclusions at page 92 of the bundle: "
'1. The motorcycle consists mainly of road parts with very few racing parts fitted and is mainly a 1970-1971 road model. ... "5. The engine is definitely not a 1964 Alla D'Oro racing model as the 1964 engine had an enclosed wet clutch which was not changed to a dry open clutch until 1966. The engine is a road engine with the addition of a racing clutch cover and outside flywheel and was originally in 1970-1971.'" "24. The important matter, in view of the inducements that I have already referred to, is that it is perfectly clear that there were no matching engine and frame numbers, so gone was the element of original authenticity. Secondly, it was not a racing engine but a road engine, with a few racing additions. And it was not circa 1964 but 1970-71. As I say there is no hint from any other expert that Mr Bladon was wrong on any of those three crucial points."[26]On that basis I see no prospect whatever that the judge would have changed his view, at any rate in relation to the finding of recklessness on the part of Mr Gleave.[27]In any event, none of that evidence impinges on, or derogates from, the judge's finding in relation to representation (2); that Mr Gleave knew perfectly well that the numbers upon the crank case were neither the frame nor the engine numbers, and that in that respect he was fraudulent also.[28]I have mentioned the expert evidence. There is a proposed ground of appeal in respect of that also. I can say at once that it seems to me a bad point. The position is that Mr Bladon had been appointed as joint expert and delivered an appropriate report, together with answers to a series of questions put to him by the parties, well before the trial, and the parties came to trial prepared to conduct it on the basis that the evidence of Mr Bladon would be that of a single joint expert.[29]Mr Bladon, having delivered his report and answers, for some reason which was unclear, it appears that the district judge responsible for giving directions had directed that he should be present at court to give oral evidence if necessary. When Mr Gleave's counsel arrived at court, he found that quite improperly in the light of the fact that Mr Bladon was a joint and independent expert, he was closeted with the claimant and his counsel in conference. Objection was taken before the judge that, on that basis, the defendant had lost all confidence in Mr Bladon as an expert witness and that there should be an adjournment to enable the defendant to call his own expert if he wished. The judge avoided that difficulty, and the highly undesirable and expensive incident of an adjourned trial with everybody ready to go, by stating that he would simply rely upon the written report and answers of the expert which had been available for a long time, without either side having indicated that such evidence was challenged or, more importantly, that they wished to be at liberty to call their own expert. Mr Gleave's counsel indicated that he considered he should not be deprived of the opportunity of cross-examination of the expert. The judge ruled that he was entirely at liberty to cross-examine if he wished.[30]It is said that the judge paid insufficient regard to the need to ensure that a joint expert's report on which the judge is to rely is seen by both parties to be the product of an independent expert opinion free from improper influence or bias. The point made by the judge was that, at least until the events of that morning (in which respect he accepted the assurance of the claimant's counsel that all he had sought to do was to clarify the evidence of the joint expert for the purpose of explaining it to the judge), there was no ground to suspect improper influence or bias. In the event, as far as the judge was concerned, he simply relied upon the pre-trial material, incorporating certain extracts into his judgment.[31]I should perhaps add that objection or suggestion of bias is also made by Mr Goodman on the grounds that it appears that Mr Bladon had known Mr Linton for many years. The matter is put no higher than that, and there is no evidence relied upon to suggest that that affected the evidence of Mr Bladon when giving his report. I do not consider that a vague allegation of that kind is sufficient to indicate that there are reasons to suspect bias or lack of integrity in Mr Bladon's written report.[32]In my view, there is no substance in the point concerning the expert evidence and, in any event, it is entirely independent of the evidence and findings of the judge as to representation (2) which, despite Mr Goodman's efforts before us, I consider stands on its own as a reason justifying the judge's findings in any event.[33]I would dismiss this application.

LADY JUSTICE ARDEN: I agree. The result of this application will be very disappointing to Mr Gleave. Mr Gleave feels that there has not been a fair trial of the issues as far as he is concerned. However, he did have an opportunity to put forward at trial the whole of his case. It would not be fair on the claimant if the case had to be re-tried simply because Mr Gleave did not bring forward all the evidence that was available to him to be brought forward at trial.

[35]Mr Altinier's evidence that he had sold to Mr Gleave an Aermacchi 350cc Alla d'Oro bike 1964/1965 was, in any event, effectively before the court: see paragraph 2 of Mr Gleave's supplemental witness statement.[36]Moreover, this evidence did not, in any event, answer the inference which the judge drew from the evidence of Mr Linton. This presented the real difficulty for Mr Gleave, and Mr Gleave in my judgment had no real answer to that.

LORD JUSTICE POTTER: Thank you. The application will be dismissed.

Order

application for permission to appeal dismissed.