Sutton v Hutchinson

LORD JUSTICE WARD: The appellant is a lap dancer. I would not, of course, begin to know exactly what that involves. One can guess at it, but could not faithfully describe it. The Judge tantalisingly tells us, at paragraph 21 of his judgment, that the purpose is "to tease but not to satisfy".

By about the end of 2002, or early in 2003, the appellant seems to have begun to tease the respondent. He, being a rich businessman, sought, no doubt, to enliven his lonely evenings in London by seeking entertainment at the Spearmint Rhino club in Tottenham Court Road where the appellant was then employed. Having been tempted, he managed to obtain her telephone number and invited her to dinner. It was not exactly the traditional boy meets girl, "Let's have dinner, darling" kind of invitation. It was an invitation which she accepted, but entirely on the basis that she would be there as his escort and, as his escort, she would provide the services of companionship and amusement, but for a consideration. That consideration would amount, according to the judgment, to perhaps about £700 or £800 a night for the pleasure of her company at dinner. But the arrangement was made on a number of occasions and, as they went on, the relationship changed and at some time early in 2003 it is common ground that the services included sexual services, for which even more money was paid as a consideration. Whether or not rule 2 of the Spearmint Rhino club had been breached, requiring that you could get no satisfaction, we do not know and fortunately do not have to decide.

As the Judge indicated at paragraph 4:

Her case, in a nutshell, was essentially this: that insofar as cheques can be traceable into her account, these were payment for her escort services of the compendious kind I have described. Insofar as it was alleged that she was paid in cash, she effectively denied the receipt of the money. Thus it was that in May 2004 Mr Sutton began proceedings in the Central London County Court for recovery of £73,000. HHJ Harris entered judgment in his favour on 28th January 2005, after a trial that lasted about four days.

One may ask, how on earth does a case like this see the light of day? By March 2003 the respondent was paying the appellant enough money for her to be able to cease work at the Spearmint Rhino club. They must have seen a good deal of each other during the months that followed. The relationship they had, of whatever kind it may have been, began to break down towards the end of the year. She went back to work in December 2003. Matters got worse in the New Year. He became angry and, I suppose, the flavour of the case is captured in a few passages of his cross-examination which I pick up at page 225 of the bundle. Mr Noble, counsel who appears for the appellant here, as he did below, put this question:

Those text messages and communications became sufficiently threatening, the appellant felt, for her to complain eventually to the police that she was being harassed by Mr Sutton. He, realising that this affair, if one may call it that, was over, had consulted solicitors and, perhaps unusually, had given evidence about the advice he had received. The evidence from the solicitor was, as he explained to the Judge on page 227:

No doubt in that frame of mind, the statement to the police officer from Miss Hutchinson being in the bundle dated 19th March 2004, he began the proceedings shortly thereafter. Incidentally, one should not pass from referring to that statement, made in the usual way, acknowledging that if it was tendered in evidence, she would be liable to prosecution if she wilfully stated in it anything she knew to be false or did not believe to be true. Towards the end of that statement, she says this:

On the face of it, that would appear to be a lie. The general ground of the appeal was:

In his oral submissions before us this morning, Mr Noble advanced, essentially, two arguments to challenge the Judge's conclusions. He submitted that detailed examination of the numerous accounts and numerous schedules of money moving here and moving there would reveal two fundamental flaws in the claimant's case. The first can be summarised in this way, that an analysis of his income and expenditure over the 15 month period of this association would demonstrate that there was no surplus available from which to advance £73,000 by way of loan to her. Having regard to the income which he said was received entirely from his company, Shardow Ltd, the amount alleged to have been paid in consideration of her escort services, coupled with the inevitable expense of living in hotels in an expensive part of London and the other gifts lavished upon this lady, would have revealed that he could not possibly have paid her anything more.

The second essential submission was that he must have been lying when he explained that he drew monies in cash from his accounts and paid them over to the appellant because the analysis of the accounts reveal that if he drew cash from the company he paid the identical, or nearly identical, sum of money back into the joint account he operated with his wife, from which it was almost immediately transferred back again into the company, so the money went round in a circle and there was nothing left, by way of cash, with which to support the allegation that he had lent those cash monies to her.

To deal with the first point, Mr Noble has the difficulty that this point, which I hope, from my summary of it, is a simple point, was never put to the witness, Mr Sutton, throughout the two days of his cross-examination, nor was it put to the Judge. It is a point, the devastating effect of which seems to have occurred later. It would be a little unfair, perhaps, therefore, to hold it against either the witness, who was roundly challenged as being both a liar and the forger of documents, to find against him in those circumstances.

So far as the Judge is concerned, the point did not occur to him as being as plain as I have tried to annunciate it. It is plain, both from his judgment and his interventions during the course of cross-examination. To mention but a few, I notice, for example, at page 112 of our bundle that the Judge, in the midst of cross-examination about movements of money from the account, says, "I am sorry, I am a little lost here." At page 118, he is saying, "I am not quite following this." If we turn to page 158, we find the Judge asking:

So the point appears to have been ill-formulated at that stage. As the cross-examination continued, there are these passages at page 164, when figures were being put to the Judge.

I cannot pretend to have read every word of two days of the transcript with a fine-tooth comb, but nowhere in the cross-examination as followed, and the passages I have read came at the end of the first day, nowhere in the second day does Mr Noble appear to have added up these figures and concisely put the precise point to the witness, or indeed to the Judge.

The second point can be exemplified by these passages perhaps quite lengthy passages, from the cross-examination at page 117. This, I think, is one occasion, but there were others, when Mr Noble was cross-examining about the roundabout transfer of money. He says:

Then the Judge interrupts, as I have already indicated:

That passage is an indication, as I read it, that there was, quite regularly, money in his back pocket. Where it came from is perhaps not entirely clear. It is plain from the transcript in several passages that although the witness was saying he had cash monies, he was also, quite clearly, indicating that the sole source of his money was his company, Shardow, and, as I say, he made that quite plain on a number of occasions. For example, our attention was drawn to page 162. An answer given was this: "There is no other source of earnings."

How, then, did the Judge deal with that? He decided in paragraph 54 of his judgment, this:

The criticism of that passage is that the Judge, as Mr Noble says, simply dreamed that up. As I have understood the evidence, there was a great deal of uncertainty about precisely what the witness was saying and it is quite clear that at times he had money in his pocket, surplus to that which he was drawing from the company. I will turn to this in a moment.

As to the second point urged upon us this morning, the Judge's view of that in paragraph 55 is this:

In the light of that conclusion, which we must examine in a little more detail, it seems to me to be quite hopeless to submit that this is a perverse judgment, that it is a judgment which no reasonable judge, having heard the case, could possibly have arrived at. It is far from that. Even if the points urged upon the Judge, or urged upon us, are taken at their highest, they are but two factors in a complicated case, well justifying a description of murkiness.

The other matters in the case which bear hugely upon the credibility of these witnesses, both of whom emerge from this case hardly smelling of roses, each of whom the Judge properly treats as meriting a great deal of caution before he could arrive at a conclusion, one factor in a system would be the documents. There were a number of written documents that could throw some light on what was happening between them. For example, documents, the genuineness of which were not in dispute, included a number of acknowledgments written by Mr Sutton that he had made a number of payments both in cash and by cheque and credit transfer to him, was saying they were gifts paid of his own volition and in appreciation of her friendship. There are no other reasons for these gifts. In not dissimilar terms, there are typed documents, the objective of which was to explain the nature of the gifts that had been made, whether or not this might have been used for the purpose of presenting to the Inland Revenue, lest it be suggested that the sum of money, and I remind myself, it was in excess of £100,000, was a form of income on which tax would be paid, I do not quite know, but in those documents Mr Sutton was acknowledging that he "decided at frequent intervals to bestow certain gifts on Miss Hutchinson, usually jewellery, holidays, or money." In another document, almost identical, the gifts were said to be a Honda CBR, which I think is a motorcycle, and an Audi TT motor car. There were other documents in which he was referring to loans, and they are documents which were the subject of challenge.

The Judge said this in paragraph 25:

That passage is useful insofar as it deals with an observation made by Longmore LJ when giving permission to appeal. He had granted permission, explaining in his reasons that:

Mr Noble referred to that and sought to rely upon it insofar as he could. I think he had to concede, and it certainly appears to me to be the case, that if these were loans, distinct from the other payments for the immoral services he received, then the consideration for the loans was the promise to repay them, not the promise to perform sexual acts for remuneration.

Secondly, and with respect to my Lord, I am not sure that the mere payment of a true loan paid at a time when other monies were passing hands as payment to the prostitute that that background renders the loans invalid. In this case there is no pleading in which the claimant has to rely on the immorality or the illegality to support his claim. His claim is straight forward: these were monies lent and the issue was joined on that basis. I see no prospect of success for the contention that the loans were so tainted with illegality that the court ought to refuse judgment on that basis. The real issue was, as the defendant said, that these documents are a complete fabrication. What were these documents? One was a receipt. It is written on the note paper of the Metropolitan Hotel in Old Park Lane in London at page 78 and it says:

He signs it on 9th September 2003 and below his signature is another signature, acknowledged to be a signature of the appellant, but nonetheless a forged document, as I shall explain. To like effect, a document dated 5th November in which Mr Sutton acknowledged receipt of £8,500 cash from Miss Kay Hutchinson as part payment of loan amounts outstanding, signed again by him, with a signature, again acknowledged to be a correct likeness of her signature, though it is different from that on the first receipt. Then there is a document which is undated. It reads:

Curiously, there is another photocopy of that document on which her signature does not appear. Her case was not that the signatures, and this one is again different from the other two, do not look like hers, but they were not placed by her on any appropriate piece of paper. Indeed, she denies, as I understand it, that these documents are true documents altogether. The difficulty with that argument was that there was, as the Judge observed, absolutely no forensic evidence to suggest how this forgery could have been perpetrated. It was simple, says Mr Noble, you just put a signature onto a photocopy and photocopy the resultant compilation, but the Judge rejected that in paragraph 32 of his judgment. He says:

His conclusion at the end of that balance, in paragraph 37, was that the documents were genuine.

The Judge dealt with the difficulty about the documents at C23 and C23A, namely to those where her signature appears on one version but his does not appear on the other. He again dismissed that point on the basis, essentially:

Another crucial document was an e-mail sent, apparently, by Mr Sutton to the defendant on 22nd November, being the date on that e-mail. This was subject to an enormous amount of challenge as to how that document came to be produced. There are pages of cross-examination about it. Once again, there was no forensic evidence to support the essential challenge to its veracity, the challenge being that the message on the document was completely fabricated. There was some expert in court. No permission had been obtained to produce expert evidence. Mr Noble acknowledged his difficulty in the teeth of objection from the claimant's counsel, appearing before him in the court below, where Mr Sutton appears in person today. So the Judge had no great help on that. The important point is this. The message reads to this effect:

In addition to the technical implausibilities alleged to have created that message, there was a challenge as to the factual matrix of the message and the reference to leaving a note at the Sanderson. That note is accepted to be a genuine one, though it is undated and the date of it was the subject of challenge. That note reads to this effect, written by Mr Sutton, at page 65:

Miss Hutchinson's case was that in about December that letter was sent to her, though it was in an envelope bearing the date, I think 5th December. The dispute was whether the envelope contained that document or a brochure of some property Mr Sutton was going to buy for her. Her case was that she had e-mailed him on that day (page 64), explaining:

She was saying that he had given her cheques for some £15,000 or £16,000 and had countermanded payment. That was the money that she was asking for. His case was that she had come back from Hull in November with £10,000 in cash. She had given him £10,000 to keep in the hotel safe, and that money he withheld from her. Looking at his e-mail, "I left the note at the Sanderson" seems to me to refer only to the note which I have read in which he was saying, "You have chosen to ignore them and to focus on getting your money back." To what does "getting your money back" refer? The Judge found, and I am inclined to agree with him, that that more naturally referred to getting the £10,000 back rather than in some way getting back money she never had because she never got it because he stopped the payment of it. So it seems to me the Judge's construction is the more probable one. His assertion, "I am not leaving you the money", is an assertion, as he said in the e-mail, "I am not letting you off the loans I have made." The e-mail refers to "offsetting the 10k you gave me against the money you owe me." Once again, I agree with the Judge's analysis of this. That would be the most extraordinary document to concoct with a tale of £10,000, wholly fictitious, with a note at the Sanderson which relates to a document actually delivered a month later.

All in all, it points to the conclusion that the Judge arrived at, that the documents were supportive of Mr Sutton's case. It did not end there. The Judge thought that she had lied to him about her bungalow in Hull. That is an adverse finding of fact against her. He thought that she was lying about her own e-mail in which, in asking for money, she attempted to suggest she was asking for money for payment of services and not asking for a further loan which the Judge felt, in paragraph 39, was the explanation which made the most sense.

The Judge, moreover, had evidence from a Miss Banks who, in the context of this case, has the most unfortunate nickname of Lolly. She, too, works at the Spearmint Rhino club, and so knew both of these parties. She gave evidence to the Judge that on two occasions during the year, in conversation with Miss Hutchinson, Miss Hutchinson acknowledged that she was obtaining loans from Mr Sutton. The Judge believed her and that supported his finding.

The Judge therefore had, it seems to me, ample evidence from which to reach the conclusion I have read from paragraph 56 of his judgment, that the documents were supportive of Mr Sutton's case. They were, in my view, overwhelmingly supportive of his case and they were more than sufficient to outweigh any challenges about the murky payments of the monies in and out of accounts designed to act as some kind of ledger for the financial transactions between these parties but, at the same time, provide some kind of cover, obscure though it may be, for his conducting the shenanigans with her, as a married man which his wife would not like to know about.

In conclusion, therefore, I am not at all persuaded that this was a perverse judgment. Indeed, it seems to me more likely than not that this money was indeed lent and therefore I would dismiss this appeal.

LORD JUSTICE KEENE: I agree.

LORD JUSTICE GAGE: I also agree.

LORD JUSTICE WARD: So the appeal is dismissed.