Riva Bella SA v Tamsen Yachts GmbH

Two of the issues before the judge, out of many issues that he had to decide, were whether the vessel in dispute was capable of achieving its warranted speed, and if not, what difference that made to its value. The vessel was a semi-displacement hull vessel, and that had a bearing on the way that the judge approached the evidence. The warranty, which the judge found in favour of the buyer and contrary to the argument of the seller, was a warranty that the vessel’s top speed at light displacement was 30 knots plus or minus 10 per cent. The judge held that the buyer had proved that she was incapable of achieving 30 knots but had failed to prove that she was incapable of achieving 27 knots, although that, he said, was a possibility. Sea trials had been carried out, but the judge identified two flaws in those trials. First, the trials were carried out at a displacement of 170 tonnes, whereas the lightship weight for the yacht was 158.8 tonnes. The second flaw was that the trials did not take place at maximum engine power, which the judge said “it is critical to do with a semi-displacement or planing hull.”

Further trials were carried out a year after delivery, but the judge, supported by the evidence of at least one, and probably both experts, concluded that the reported results of those trials must have been mistaken, at least in some respects. There was therefore no direct empirical evidence of the performance of the vessel at maximum power and at light displacement as against the warranted speed. The remainder of the evidence was, in the judge’s words, extremely vague and of the most general kind.

The judge was thus faced with a case which, in the end, required him to draw inferences from the proven facts. He felt unable to infer from the facts that he found proved the conclusion that the vessel was incapable of achieving 27 knots, let alone that she was capable of achieving no more than 20 knots or thereabouts. At best, he said, it was no more than possible that she was incapable of meeting the warranted speed. He thus held that since the burden of proof was on the buyer, the buyer had failed to prove its case. On the second issue he held that it was impossible to quantify any diminution in value without knowing precisely what the shortfall in speed was, assuming, contrary to his conclusion, that there had indeed been a breach of the warranty.

Both these conclusions are, of course, conclusions of fact which the buyer wishes to challenge. Permission to appeal was refused on the papers by Longmore LJ, and Mr Parsons QC and Mr Ferrer renewed that application. Mr Parsons accepts that it is not sufficient for him to establish a mere breach of the warranty; he must go further, and show that this court would be entitled to substitute for the judge’s conclusion a positive finding that the maximum speed of the vessel was no more than 19 or 20 knots at light displacement.

As Auld LJ said in Verlander v Devon Waste Management [2007] EWCA Civ 835 at paragraph 24:

“The burden of proof remains part of our law and practice -- and a respectable and useful part at that -- where a tribunal cannot on the state of the evidence before it rationally decide one way or the other.”

The other authority relied on by the buyer is the case of Rhesa Shipping Co SA v Edmunds, The Popi M [1985] 1 WLR 948. In that case, the trial judge was actually criticised by the House of Lords for not falling back on the burden of proof. As Lord Brandon explained at page 955:

“A judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on a burden of proof is the only just course for him to take.”

It is true that the judge did not set out all the evidence that had been adduced before him, and in particular did not refer to evidence about the sister ship of the vessel, but it is not the judge’s role to set out all the evidence. His function is to explain, with reasons, why he has arrived at one conclusion or the other. In short, he must explain to the losing party why he lost. In Bekoe v Brooms [2005] UKPC 39, Lord Carswell said:

“A judge sitting without a jury does not necessarily have to review every fact and argument presented to him. His function is to reach conclusions and to give reasons to support his view, not to spell out every matter as if summing up to a jury.”

As is well known, an appellate court will be very wary of interfering with factual conclusions of a trial judge, particularly one who has heard the witnesses. As Lord Hoffmann explained in Biogen v Medeva [1997] RPC 1:

“The need for appellate caution in reversing the trial judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance . . . of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation.”

In the course of his submissions Mr Parsons has taken me to selections from the transcript and from the documents. I can see that it is possible to construct a case which shows that a judge could have concluded that a breach of warranty had been made out. I find it impossible to see that there was any substantial case that a judge could have concluded that the maximum speed of this vessel under light displacement did not exceed 20 knots, and moreover the fact that a judge could have decided that the warranty had been broken does not, in my judgment, mean that this judge should have decided that the warranty had been broken. Ultimately, as Lord Hoffmann explains, the evaluation of the evidence is a matter for the judge. This is a case where the judge heard expert evidence; the proof of the breach of warranty was, in essence, a question of drawing technical inferences based on proven facts. That is pre-eminently a matter for the experts, and in my judgment there is no real prospect that this court would interfere with the judge’s conclusion. Mr Parsons accepts that if he fails on that point then the quantum point does not arise.

Accordingly, for these reasons, which are essentially the same as those given by Longmore LJ, I refuse permission to appeal.