“The proper question for us to ask ourselves is not “Did the Appellant carry out proper due diligence?”; but “Did the Appellant have the means at its disposal of knowing that by its purchases it is participating in transactions connected with fraudulent evasion of VAT?”
“An allegation of dishonesty must be pleaded clearly and with particularity. That is laid down by the rules and it is a well-recognised rule of practice. This does not import that the word ‘fraud’ or the word ‘dishonesty’ must be necessarily used. The facts alleged may sufficiently demonstrate that dishonesty is allegedly involved, but where the facts are complicated this may not be so clear, and in such a case it is incumbent upon the pleader to make it clear when dishonesty is alleged. If he uses language which is equivocal, rendering it doubtful whether he is in fact relying on the alleged dishonesty of the transaction, this will be fatal; the allegation of its dishonest nature will not have been pleaded with sufficient clarity.” 42. In Armitage v Nurse Millett L.J. having cited this passage continued: “In order to allege fraud it is not sufficient to sprinkle a pleading with words like “wilfully” and “recklessly” (but not “fraudulently” or "dishonestly"). This may still leave it in doubt whether the words are being used in a technical sense or merely to give colour by way of pejorative emphasis to the complaint.” 43. In Paragon Finance plc v D B Thakerar & Co he said on the question of pleading: “It is well established that fraud must be distinctly alleged and as distinctly proved, and that if the facts pleaded are consistent with innocence it is not open to the court to find fraud. An allegation that the defendant ‘knew or ought to have known’ is not a clear and unequivocal allegation of actual knowledge and will not support a finding of fraud even if the court is satisfied that there was actual knowledge. An allegation that the defendant had actual knowledge of the existence of a fraud perpetrated by others and failed to disclose the fact to the victim is consistent with an inadvertent failure to make disclosure and is not a charge of fraud. It will not support a finding of fraud even if the court is satisfied that the failure to disclose was deliberate and dishonest. Where it is expressly alleged that such failure was negligent and in breach of a contractual obligation of disclosure, but not that it was deliberate and dishonest, there is no room for treating it as an allegation of fraud.” (Emphasis added)
“ … as evidenced by the fact that no such activities were ever undertaken by either the First or the Second Defendants. Alternatively, if such an intention ever existed, it only remained in existence for a fleeting period of time and was rapidly abandoned”
“If however a witness, as in this case, fails to comply with the judge’s warning, it is necessary for the judge to make an assessment of the damage which that has caused.”
“He said he hadnt [sic] thought about the VAT but had checked that the CIS was being paid over.”
“The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is less likely than negligence. Deliberate physical injury is usually less likely than accidental physical injury. A step-father is usually less likely to have repeatedly raped and had non-consensual oral sex with his under age stepdaughter than on some occasion to have lost his temper and slapped her. Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation. Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur…. Ungoed-Thomas J expressed this neatly in In re Dellow’s Will Trusts[1964] 1 WLR 451 , 455: ‘The more serious the allegation the more cogent is the evidence required to overcome the unlikelihood of what is alleged and thus to prove it.’”
“This substantially accords with the approach adopted in authorities such as the well known judgment of Morris LJ in Hornal v Neuberger Products Ltd[1957] 1 QB 247 , 266. This approach also provides a means by which the balance of probability standard can accommodate one’s instinctive feeling that even in civil proceedings a court should be more sure before finding serious allegations proved than when deciding less serious or trivial matters.” “More sure” may be read as suggesting a higher standard than the simple preponderance of probabilities. 63. Lord Lloyd, at pp 577-578 on the other hand, took a more straightforward line: “In my view the standard of proof under [section 31(2)] ought to be the simple balance of probability however serious the allegations involved … mainly because section 31(2) provides only the threshold criteria for making a care order … if the threshold criteria are not met, the local authority can do nothing, however grave the anticipated injury to the child, or however serious the apprehended consequences. This seems to me to be a strong argument in favour of making the threshold lower rather than higher. It would be a bizarre result if the more serious the anticipated injury, whether physical or sexual, the more difficult it became for the local authority to satisfy the initial burden of proof, and thereby ultimately, if the welfare test is satisfied, secure protection for the child. . . There remains the question whether anything should be said about the cogency of the evidence needed to ‘tip the balance’. For my part I do not find those words helpful, since they are little more than a statement of the obvious; and there is a danger that the repeated use of the words will harden into a formula which, like other formulas (especially those based on a metaphor) may lead to misunderstanding.”
“He seems, in my judgment, to have lost sight, in relation to these important events, of the true standard of proof, namely what explanation was more probable than not, having taken account of the nature and gravity of the allegation.”