Parker v Synder & Ors

LORD JUSTICE GAGE: This is an application by a claimant for permission to appeal an order of HHJ Maddocks dismissing his claim against three defendants. He also seeks permission to appeal an order of the judge dismissing an application to adduce further evidence made between the handing down of the judgment and before drawing up the order.

I shall refer to the parties throughout this judgment by their surnames, I mean no disrespect from that, save for the defendants whom collectively I shall refer to as "the respondents".

The claim is most comprehensively set out in the judge's judgment at paragraph 1, which I quote:

The judge went on to describe the nature of the business in the following terms, paragraph 7 of the judgment:

The defendants were described by the judge in the following terms: so far as Mr Snyder is concerned, at paragraph 20 of the judgment the judge said:

So far as Miss Siddons is concerned, the judge said of her as follows:

The third defendant, David Price, was described, together with two other witnesses, Wiegand and Elliott, by the judge in the following terms:

The judge summarised the events that had taken place since the formation of Dawn. It is necessary for the purpose of this judgment to give but a brief summary of the background: in 1987 Dawn was formed. From its formation up to 1999 there were two joint managing directors, Nivern and Finn. A further member of the management team, Pearson, joined in July 1995 as Operations and Logistics Manager.

In October 1998 there was a burglary at Dawn Mill. The judge found that Parker was suspicious that either Nivern or Finn was involved. In January 1999 Parker summarily dismissed Finn because he found that Finn had been stealing stock. Nivern, who had been on sick leave for some weeks, ceased his employment with Dawn in August 1999. In May 1999 Parker sought to introduce Snyder as Chairman of Dawn leaving him, Parker, to get on with his other businesses. Terms were discussed and Snyder took up the position of chairman. He was appointed a director on 24th May 1999 and Parker resigned as Director and Chairman on 25th May 1999.

The judge carefully recorded in his judgment the events occurring after that date up to the time when Snyder, together with Price, offered to take over Dawn's business. The offer was made in a letter dated Friday, 3rd December 1999 and its material terms read as follows. I quote from the judgment at page 42 of the papers and paragraph 38:

Agreement was reached in principle on 8th December 1999 and Snyder and Siddons instructed solicitors Cobbetts to prepare documents for the acquisition of shares in Dawn. Parker had his own solicitors acting for him. The agreement was completed on 10th January 2000, the terms of which are set out in paragraph 40 of the judgment. I read the first paragraph:

The judge then set out the shareholdings of the various other members and continued:

It is out of this agreement that the claim arises. It was in two parts: the conspiracy was alleged to have been formed in August 1999. The first part was an alleged course of conduct by the conspirators to "trade down" the business of Dawn in order to secure its purchase and below its real value. The second part was an alleged conspiracy falsely to represent to Parker that the parties to the conspiracy were proposing to introduce further funding without which Dawn would be unable to continue in business.

Before turning to the judge's findings in a little more detail, I must refer to the judge's findings in respect of the parties and to the witnesses who gave evidence at trial. He heard the oral evidence of some 16 witnesses of fact over a period of 18 days. His assessment of the main witnesses is expressed in paragraph 49 of the judgment. He dealt with each one individually:

I pause there to interpolate that the question of the two cheques is one of the main grounds sought to appeal this judgment. I shall return to it. Continuing the quotation from paragraph 49:

The judge then went on to deal with the first part of the conspiracy. He referred to the fact that this part of the claim was based on the evidence of Pearson as set out in his, Pearson's, witness statement of the 25th March 2004. The judgment at paragraph 50, page 46 of the documents, recites the relevant passages of Pearson's witness statement. It reads as follows:

He then refers to the PRS visit:

“I recall Lawrence Snyder specifically repeating whilst driving to the mill, that Barry Parker must not be advised as to the proposed plans” and to the meeting afterwards over lunch at the Bella Vista at which: An alternative plan was required, which Lawrence Snyder advised that he would develop…. It was agreed that there would be a further meeting in order to discuss matters in more detail.”

In the next paragraph of the judgment the judge set out in detail why he rejected that evidence and why that part of the claim failed. In summary, he found Mr Pearson's evidence unlikely and contrary to the weight of evidence about how the company actually performed.

The second part of this conspiracy was based mainly, but not exclusively, on the letter of 3rd December 1999 to which I have referred. The judge said that, apart from the letter, the allegations were unrecorded and unspecific. So far as Mr Snyder was concerned, in addition he referred to a meeting in November 1999 when the judge recorded that the allegation was that Snyder had represented Dawn, was in severe financial difficulties and its financial position weak. It was said that that representation was false. Secondly, so far as Siddons is concerned, the allegation was that she was generally pessimistic about the business but there were no contemporaneous notes of conversations with her. Again it was said that her representations were false.

So far as the 3rd December letter is concerned, it contained the phrase that the company was: "not in a fit condition to continue without further funding." Again, it was alleged that that was a false representation. In dealing with this, the judge then set out what he understood and found as a fact Dawn's situation was at the time of these alleged misrepresentations.

He referred to three difficult areas so far as the company was concerned. First, it had lost its original joint managing directors. Secondly, it had suffered a number of misfortunes: burglaries, cross-claims by customers due to inadequate stock controls and the insolvency of an associated company. Thirdly, the trading figures showed losses in seven out of the last nine months. The judge then found, first, the statement of the letter was justified, secondly, the views set out in the letter were the genuine views of those behind the letter, particularly Snyder, and, thirdly, Parker did not rely on them. He found that Parker turned to Blaskey, the company accountant, if and when he needed financial advice and in any event he, Parker, made his own decisions and did not trust others. Accordingly, the judge dismissed this part of the claim.

The next part of the claim was an alleged fiduciary duty owed by the respondents. The judge found as a matter of law that they owed no duty to Parker. He held that they were acting on their own behalf and not on Parker's behalf and that Parker had his own solicitors to act for him.

The grounds of appeal upon which permission to appeal are sought are divided into two parts, parts A and B. I deal first with part A. This arises from the application by Parker to adduce further evidence after judgment had been handed down and before the order drawn up. There is no dispute that the judge had jurisdiction to entertain the application. The relevant dates are as follows: the judge heard oral submissions at the end of the case, which ended on 21st October 2004. Additional written material was submitted to him, he then reserved his judgment and handed down a draft judgment on 10th December 2004. Following him handing down the judgment, the witness statement of Roger Finn showed that Parker got in touch with him, as a result of which an application was made for further evidence to be heard in the form of evidence from Roger Finn. The application was dated 7th January 2005. It came before the court on 10th January 2005. The judge was unable to deal with the matter on that occasion. It was finally determined by a judgment given by the judge on 4th February 2005.

The application sought permission to call evidence from Finn who, it will be recalled, was one of the former joint managing directors. It related to an issue which arose in the course of the trial in respect of two cheques drawn for cash, signed by Parker in respect of one and by both Parker and Siddons in respect of the other. The details are as follows: the first cheque, chronologically, is dated 18th December 1998, was drawn in the sum of £2,000 and signed by Parker only. The second was for cash in the sum of £997, dated 13th October 1999 and signed by both Parker and Siddons. The evidence and the judge's findings in respect of the cheques are contained in paragraphs 44 to 48 of the judgment. At paragraphs 44 to 46 he describes the evidence about the cheques and the history of how they came to light:

The evidence showed, and Miss Siddons accepted, that she drew the cheques and in respect of them made false entries in the books showing they were to pay debts due to Littlewoods. She said she did so at the instigation of Parker who received the cheque in both instances. I have already set out the findings that the judge arrived at in paragraph 47. He continued at paragraph 48:

That undermining of her confidence is reflected in the following paragraph in which he set out his findings as to the voracity and accuracy of each of the individual witnesses.

The evidence which Parker sought to adduce post-trial was evidence about the cheque for £20,000. In a witness statement made on 6th January 2005, Mr Finn said:

Mr Finn, in his statement, went on to explain how towards the end of December 2004 Parker had got in touch with him by telephone. Apparently, Parker was on holiday in Thailand at that time. After telling him about various matters, Finn continued in his statement at paragraph 3, page 74, as follows:

It was submitted to the judge, as it has been to this court, that this fresh evidence materially affected the judge's finding in relation to the two cheques to which I have referred. This in turn might cause the judge to change his findings the issues of conspiracy and misrepresentation. The judge was referred to various authorities and dealt with each of the factors that are set out in Ladd v Marshall [1954] 1 WLR 1489.

He held, firstly, Parker had not acted with reasonable diligence in obtaining the evidence for use at trial. The basis for this holding was, in the judge's view, that the evidence about the cheque had first been given on the 4th October 1999, Finn and Parker had been in contact during the course of the trial, and no attempt had been made by Parker to seek evidence from Finn on this issue until after judgment. Accordingly, as I have said, the judge found he had not acted with reasonable diligence.

Secondly, he found that it would have had no impact on the evidence of the other two respondents, Snyder and Price. He had already made unfavourable comments about Miss Siddons' evidence. It might have caused him to make even more unfavourable comments that would not have affected the substantive claims.

Thirdly, he found that on the face of it Finn was participating in a dishonest removal of money from the company. In any event, Parker's own evidence was that Finn was a thoroughly dishonest man. In all the circumstances, this was a factor to be taken into account when assessing whether the evidence was such as "presumably to be believed".

The application to appeal this decision of the judge is sought on a number of grounds. In addition there is a freestanding application for this court to hear the evidence within the appeal. In support of this proposed ground of appeal, counsel, in a written skeleton argument, relies on a number of factors which he submits shows that the judge's decision was wrong. They are grouped together under a number of headings. First, the October 1999 cheque and December 1998 cheque. The factors relied on under this heading are set out under 30 separate different matters dealing with the background to the evidence in relation to the cheques, starting with Siddons' attack on Parker's integrity in her witness statements. They outline the difficulties which Parker's legal team encountered in obtaining disclosure of the cheques and the late introduction of them into evidence. They further refer to much of the evidence given by the witnesses in respect of these cheques.

Secondly, under the heading "significance of the October 1999 cheque and the December cheque", a number of factors are referred to, principally relating to the effect which Finn's evidence might have had on the judge in his assessment of Siddons' honesty. It is further submitted that this evidence, damaging to Siddons, ought to have caused the judge to draw adverse inferences against Snyder. Next, it is submitted that the adverse inferences as to Siddons' evidence would have had an inevitable beneficial effect on the judge's assessment of Parker's credibility. Finally, it is submitted that if Parker's evidence was accepted and he had been told of Siddons' dishonesty in respect of the cheques he would never have agreed to the sale of his shares without first holding a full scale enquiry. It is submitted that if the judge accepted Finn's evidence it would demonstrate a breach of fiduciary duty by Siddons.

Thirdly, in the light of recent authorities, it is submitted that the judge applied the wrong test. In respect of the reasonable diligence test, he wrongly equated that with reasonable speed. It is submitted that Parker could not have known of Finn's involvement until Finn volunteered the information in the telephone call referred to in Finn's witness statement. Further, it is submitted that the judge failed to give proper weight to the overriding objective of doing justice to the parties. In his assessment of the balance of fairness, it is said that the judge gave too much weight to fairness to the respondents and insufficient weight to fairness to Parker. Next, the judge took a too strict and onerous view of the second factor of the threefold test in Ladd v Marshal, namely the inference the evidence would have had on the case. Finally, he failed to apply these tests flexibly as is referred to in Charlesworth v Road Relay [2001] 1 WLR 230.

For my part, I am not persuaded that the judge's decision was arguably wrong. It is clearly a decision taken in the exercise of his discretion. As Neuberger J pointed out in Charlesorth v Road Relay (No 2) It will generally only be in rare cases that the judge will exercise his discretion to admit new evidence after judgment has been handed down. Notwithstanding counsel's argument that the evidence demonstrated a breach of fiduciary duty by Siddons, in my judgment this was essentially evidence going to the issue of credibility. It did not impinge directly on the substantial issues relating to the claim. Whilst I recognise that credibility in this case was a very important factor, the judge was in the best possible position to assess whether the evidence, even if accepted, would have caused him to reassess his findings. He had already expressed reservations about Miss Siddons' reliability.

As far as Parker was concerned, there were many other matters which could and no doubt did cause the judge to conclude that he was unreliable as a witness. We have been referred in the skeleton argument of counsel for the respondents to passages in the evidence of Parker which show him in a bad light when giving evidence. Indeed, in his submissions today Mr Booth accepted as much.

In any event, this evidence in my judgment in no way impinges on either Snyder or Price. Whilst I would not have been as critical, as the judge was, of Parker's failure to obtain his evidence earlier, it does appear from Finn's statement that it was Parker who asked Finn whether he knew about these cheques. There would appear to have been no reason why he did not do so earlier than late December 1999. Further, the judge referred to the obvious difficulties in relation to Finn's unreliability as a witness.

For these reasons, in my judgment, this ground of appeal, which seeks to overturn the judge's decision refusing the application to call new evidence, has no prospect of success.

There remains, so far as this part of the appeal is concerned, the application that this court should hear new evidence. I recognise the argument that the court might view the application more objectively than the judge who had already made his findings. However, in my view, having reached the conclusion that the judge's decision refusing to hear this evidence cannot properly be challenged, it is in my opinion in the highest degree unlikely that this court would entertain such an application. Whereas here I have reached the conclusion that the judge did not err in the exercise of his discretion, I do not think it arguable that this court would entertain this evidence.

I turn to the second ground, ground B. The applicant seeks to persuade this court that the judge was wrong in his findings of fact. The proposed grounds of appeal put the matter in three ways: first, the judge failed to draw the appropriate inferences from facts before him, secondly, he failed to make findings of fact that were required and, thirdly, he failed to take material evidence into account when considering the accuracy of credibility of witnesses in particular instances.

The principles of law are not in dispute, although counsel on each side in their skeleton arguments highlight different passages of the relevant authorities. It is not in dispute that generally it is only rarely that this court will interfere with the judge's findings of primary fact. The court may be more ready to interfere with inferences drawn from specific facts.

As my Lord Sir Peter Gibson said in Fuller v Strum [2002] 1 WLR 1097, which is in divider 5 of the authorities bundle, at paragraph 31:

Counsel for the respondents, in his skeleton argument, relies on a passage from Lord Hoffman's speech in Biogen Inc v Medeva Plc [1997] RPC 1 at page 45, the report to be found in divider 9 of the authorities bundle. In the middle of the page:

Mr Booth QC seeks to persuade this court that a very large number of findings by the judge were wrong. His submissions on this ground of appeal are divided into 12 main headings, each on different findings. Under each of the headings, a very large number of separate factors are set out and relied upon. Mr Booth's closing submissions to the judge were equally lengthy. In the circumstances, it seems to me hardly surprising that many of the points made by Mr Booth do not feature in the judgment. It was in my judgment neither necessary nor appropriate for the judge to deal with it in his findings in as much detail as the submissions Mr Booth suggests he ought to have done.

For my part, I accept the submissions made by Mr Freedman QC in his skeleton argument that the length of the submissions of counsel for Parker and the detail of them tend to obscure the essential issues in the case. There were comparatively few documents of real importance in respect of the alleged conspiracy, misrepresentations in breach of fiduciary duty. The essential issue for the judge was which of the witnesses were telling the truth and which were accurate. I have already set out the judge's findings in respect of the important witnesses. It is clear that he came to the firm and clear conclusion that he could not rely on Parker's evidence. Equally, he concluded that Snyder and Price and Elliott were truthful and accurate.

Despite the wealth of detailed submissions placed before this court, I see nothing which persuades me that it is arguable that the judge's assessments of the witnesses were wrong. I take but a few examples of the submissions that are made to this court where it is said the judge was in error. First, the issue as to the cheques. Mr Booth argues that the judge never dealt with the submission that it would have been very odd if Parker had received cash for either of these two cheques. He would have pursued disclosure of each with the determination that he did during the trial. He also submits that it is surprising that Siddons, who had criticised Parker in her witness statements for taking money from the company, had not made the allegation in relation to these cheques in those witness statements. These allegations only surfaced in the course of her evidence when she was being cross-examined about the 1999 cheque.

The respondents point out that Miss Siddons made this allegation as another example of Parker taking money from the company. She said Parker must have collected the cash from the bank because only the person who signed the cheque was able to collect cash. This was supported by the evidence of Chapman, her assistant, and accorded with banking practice. Mr Booth criticised the judge for taking into account banking practice as supporting Miss Siddons' evidence. Mr Freedman points out in his skeleton argument that this point was one which was made by Parker himself in a supplemental witness statement; only at a later stage did he change his evidence to assert that Miss Siddons had stolen the money.

Despite Mr Booth's attempts to elevate this issue to one central to the case against the respondents, in my judgment it remains an issue of credibility. Had it been more, it would in my judgment have been necessary for it to have been specifically pleaded. It is, in my opinion, no answer to say that it was set out in the skeleton argument.

The judge observed all the witnesses. He did not deal with all the submissions made on this issue but it was an issue for him to decide in his assessment of the witnesses. In my view, it is not arguable that he was wrong in such findings as he made and for my part I am satisfied that he made all the necessary findings to decide the importance of this issue in the context of the whole case.

I turn next to the issues concerning the Cobbetts file. The judge is criticised under this heading for not dealing with the evidence emanating from the late disclosure of Cobbetts files. Cobbetts were the respondents' solicitors acting in the acquisition of Dawn. Both Snyder and Siddons said that they had no recollection of a meeting with Cobbetts on 26th August 1999. It was clear from the documents produced from Cobbetts files that they did have such a meeting. The judge found it surprising that neither had a recollection of this meeting.

The applicant invites this court to hold that the judge should have found that Snyder and Siddons were lying and that they were doing so because they were covering up their intention, at that early stage, to pursue the acquisition of Dawn for their own benefit. It is said that their double amnesia of this event and the contents of the documents leads to this inevitable inference.

Again, as the respondent's counsel pointed out, the documents disclosed from the files do not support the allegation that the respondents were at that stage seeking to acquire Dawn for their own benefit. Nor do subsequent documents and nor are they supported by the subsequent unchallenged events.

Snyder decided to leave at the stage shortly after the August meeting and thereafter became a reluctant consultant. The state of the company in December was quite different from September. Furthermore, there were other documents disclosed from Cobbetts files which supported aspects of the respondent's case. For instance, there were documents dated December 1999 which supported the respondent's evidence that they were going to inject money into the company, albeit by means of foregoing salary.

The judge, whilst finding that it was strange that Snyder and Siddons could not remember anything of the meeting, found that there was nothing memorable in the meeting or inconsistent with the main body of the evidence as to the share option being required for the directors. I see no reason for saying that this finding was arguably wrong.

Next, PRS and Pearson. The judge rejected the suggestion that Snyder's visit in September 1999 to Pre-Retail Services was for Snyder's own purposes, and not to find alternative premises from which Dawn could trade. It was in the car on the way to PRS that Pearson said Snyder repeated his outline of the plan to take over Dawn. It is submitted that the judge was wrong to reject Pearson's evidence and to find that Elliott's evidence supporting Snyder was truthful and accurate. Criticism was made of the judge's finding in relation to Pearson on the basis that having found Pearson an honest witness he could not properly have rejected his evidence about Snyder's intentions. It is said it was impossible for an honest witness to be mistaken about what he was told by Snyder.

In response, the respondents submit that this was simply an example of the judge preferring Snyder's evidence to that of Pearson. The submission is that there were powerful reasons for accepting Snyder's evidence on this point. It made no sense for Snyder to trade down Dawn. Further, it is submitted that Pearson's evidence was discredited in relation to a meeting in November 1999. It is suggested that Pearson's evidence on this issue was wholly unreliable.

The problem faced by the applicant on this, as on many of the issues, is that the judge heard the evidence about these incidents and rejected one side's version of events whilst accepting the other's. This was not only what the judge was entitled to do; it was his job to do so. It is true that he did not deal with every detail of the evidence, nor every one of the submissions. But the underlying theme is one of acceptance of Snyder's evidence and rejecting the evidence of Parker and his supporting witnesses. For my part I see no valid reason for concluding that the judge's findings were wrong on this particular issue.

The final issue that I shall deal with relates to the letter of the 3rd December 1999. This letter is recorded in the judgment and I have recited its contents. The letter is said to form the basis of the allegation of misrepresentations. The particular misrepresentation is the first reference in the letter to the weak state of Dawn. The criticism in the proposed grounds of appeal in the skeleton argument is that the judge was wrong to find that the statements in the letter were justified. It is submitted that the letter is to be contrasted with the contents of Cobbetts' file which demonstrate that no injection of funds was needed. The respondents submit that the letter was prepared as a basis for discussion if it was expected that thereafter lawyers would be instructed to protect the interests of both parties. Subsequently, that is exactly what happened.

Again, in my judgment no error is displayed in the judge's findings in respect of this letter. He prefaced his findings by setting out the position of the company at that time. He referred to the three factors which in his opinion led to the down turn in trading. He also referred to the prospect that the company would need to relocate. In my judgment, all these matters were factors which the judge was entitled to take into account when reaching his conclusion on this issue. Further, he went on to find that Parker had not proved that he relied on the representations in the letter. Again in my judgment this was a conclusion he was entitled to reach. In doing so, he referred to the fact that Parker turned to Blaskey, the company's accountant, for advice. He records the fact that Blaskey advised that the company was not insolvent. In my view, the criticisms of this part of the judgment are not made out.

I have carefully read the skeleton arguments of both parties. I do not propose to go into any further detail and thereby lengthen what is already an overlengthy judgment. For my part, I am quite satisfied that the appeal in this case has no prospect of success on any of the grounds in the notice of appeal. I would refuse the application.

SIR PETER GIBSON: I agree.