Gilruth v Harding

LORD JUSTICE SULLIVAN: I will ask Lord Justice Tomlinson to give the first judgment.

LORD JUSTICE TOMLINSON: This appeal, from an order of His Honour Judge Halbert made in the Chester County Court on 2 October 2014 after a three-day trial, relates to a single issue: the quantum of damages awarded by the judge to the claimant in respect of a breach of contract by the defendant. The judge awarded £42,500 together with interest. If the appeal succeeds the award will be reduced to £30,000 together with interest.

The claimant (respondent on this appeal) is a professional rider in the field of three-day eventing. The defendant (appellant on this appeal) was at all material times, together with his wife, the owner of a horse whose full name was Ashdale Cruise Master, but which was known in the stables as "Splash". I shall call him either "Splash" or "the horse". The claimant trained and rode Splash for four years pursuant to a contractual arrangement with the defendant.

The trial was principally concerned with the establishment of the terms of the contract. The judge found that the defendant engaged the claimant to train and ride the horse in competition; that he agreed to pay the running costs associated therewith, such as veterinary and farrier’s fees, transport costs, the costs of entering competitions and so forth; whilst the claimant for her part agreed to bear all the livery costs of keeping the horse at her yard during the eventing season. It was a term of the agreement that the defendant could not engage another rider to compete on Splash without the consent of the claimant. The claimant was to retain any prize money.

The parties to the contract envisaged that the horse would increase in value if he competed successfully. It was agreed that he was worth £30,000 as at the date of the agreement, which was June 2006. The judge found that it was an express term of the oral agreement made in June 2006 that in the event that the defendant engaged another rider without the claimant's permission, the agreement would terminate on terms that the defendant would pay to the claimant 25% of the amount by which the value of the horse had by then increased over the base value. Although agreed orally, the terms of the contract were in fact reduced into writing by the claimant at the time. The defendant declined to sign a proffered version of the contract, asserting that he was a man of his word who would honour his agreement.

On 23 September 2009, the defendant told the claimant that she would no longer be permitted to ride the horse. It seems that the defendant and his wife had formed the view that the horse had a better prospect of obtaining a place in the Olympic squad if ridden by a rider with a higher profile than that enjoyed by the claimant. The rider they had in mind was Oliver Townend, a member of the British team.

The claimant had achieved considerable success with Splash, and her achievement in training what had initially been a showjumping horse into the different disciplines of eventing had attracted notice and praise in the small world of eventing. By the end of the 2009 season it was apparent that the claimant and Splash were in the running for a place in the British Olympic team. The claimant was understandably upset at the defendant's decision, but after taking legal advice recognised that she could not compel him to allow her to continue to compete on the horse. The horse was taken from her yard to that of Oliver Townend on 4 October 2009.

Not unnaturally, the claimant turned her attention to enforcing the terms of the agreement. The defendant denied having made an agreement in the terms which I have described, contending that the agreement had been that the claimant's entitlement to 25% of the enhancement in value would arise only in the event that the horse was sold whilst the claimant was still engaged as the rider, hence this litigation.

The judge resolved the dispute concerning the terms of the contract in the claimant's favour. The defendant was refused permission to appeal against the judge's determination in that regard.

The claim as originally made and pleaded was by reference to an offer to purchase the horse for £750,000 allegedly made to the defendant in about August 2009. That would have put the claimant's entitlement at £180,000 (being 25% of £720,000). Subsequently it transpired that, whilst this figure had not been plucked out of the air, its provenance was nothing more than an approach by an agent who had said to the defendant in effect, "If I can get you an offer of three quarters of a million, will you take it?" By the time of the trial, the claim was more modest. Paragraph 8 of the amended points of claim reads, so far as material:

As is foreshadowed in that paragraph of the pleading,on 4 March 2011 District Judge Newman had given directions for trial which included the following:

On 26 May 2011 the parties jointly instructed Carol Gee of Fernhill Sport Horses in Kilkenny in the Republic of Ireland. She trades in horses for the event market. She was jointly instructed by the parties to carry out a valuation of the horse as at 23 September 2009. The letter of instruction enclosed a "curriculum vitae" itemising in detail the horse's performance at events in 2007, 2008 and 2009. Ms Gee was also given access to veterinary records which she was told "should be considered and taken into account when providing your valuation of the horse".

Ms Gee produced her report on 12 October 2011. I shall call this "her first report". As it is of some importance and relatively short, I shall set it out in full:

As is apparent, there had been some slippage in the timetable. On 3 November 2011 District Judge Sanderson directed:

On 28 November 2011 the solicitors for the defendant wrote to Carol Gee in these terms, so far as material:

The veterinary report to which reference is there made by the solicitors for the defendant reads as follows:

Ms Gee provided her response to the defendant's questions on 13 April 2012. I shall call this "her second report". Again, I set it out in full:

It was therefore the evidence of Ms Gee that, as a prerequisite of a sale, the horse would have had to undergo a full and thorough veterinary examination which would include extensive X-rays of front feet, fetlocks, hocks and stifles and "possibly the back". It was not common practice to have the back X-rayed, but Ms Gee had had cases where clients from Germany had requested it.

In an exchange at the beginning of Ms Stonefrost's final address at trial, the judge summarised Ms Gee's evidence as amounting to this: that the horse would have realised £200,000 on sale on 23 September 2009 had the back defect described by Mr Ashton not come to light; and £150,000 if it had. Ms Stonefrost accepted that that was the expert's view. A little later she came close to recognising (if she did not expressly concede) that the outcome if she lost on liability was a straight choice between an award of £42,500 or one of £30,000. She recognised that she could not persuade the judge that the horse had no value as at 23 September 2009.

The judge had no evidence on the question whether an X-ray of the horse's spine in September 2009 would have revealed lesions, but I will assume in the defendant's favour that it would have done. The judge also had no expert evidence beyond that of Ms Gee on the question whether a prospective purchaser in September 2009 would have requested an X-ray of the horse's back. Ms Gee's evidence was simply that that was not common practice, although she had come across it with German purchasers.

The judge was plainly alive to the limitations of the expert evidence because he observed to Ms Stonefrost early in her cross-examination of a witness, Rachel Greetham, that he would "have to draw a conclusion, if I find that there was a contract, I will have to draw a conclusion as to whether the back defect would have been likely to have been discovered in September/October 2009 if the horse had been sold at that stage".

Rachel Greetham is a chartered equine physiotherapist. Her short witness statement read as follows:

Ms Stonefrost was naturally anxious to put to Ms Greetham the report of Mr Ashton. Mr Browne objected to Ms Greetham being asked about Mr Ashton's report. He pointed out, quite correctly, that the defendant had no permission to rely upon the report of Mr Ashton as expert opinion evidence. He also pointed out that the contents of Mr Ashton's report were not agreed and that Mr Ashton was not being called as a witness to give evidence in accordance with his report. Mr Browne might have added, as he almost does in his respondent's notice, that the evidence was not even contained in a witness statement from Mr Ashton and could not therefore be introduced as evidence of the matters stated pursuant to the Civil Evidence Act 1995 and the rules of court made thereunder. Mr Ashton's report was in fact appended to a witness statement of 2 March 2012 made by the defendant for the purpose of seeking an adjournment of the then trial date. No indication was given pursuant to CPR 33.2 that the defendant intended to rely upon the contents of Mr Ashton's report at trial as evidence of the truth thereof.

The judge was therefore, in my view, unquestionably right to indicate (as he did on Mr Browne's intervention) that the report of Mr Ashton was inadmissible in evidence, but equally right to indicate that it could of course be put to Ms Greetham in cross-examination and that she could be asked to comment on it.

Ms Stonefrost, for her part, pointed out to the judge that Mr Ashton's report was part of the material that had been considered by Ms Gee in coming to her opinion. That may be so, but it does not render Mr Ashton's report evidence of the matters stated therein; still less does it enable the defendant to rely upon it as expert opinion evidence on the question of the value of the horse, a fortiori in a case where the court has directed that expert opinion evidence on that matter be given by a single jointly instructed expert.

The procedure for putting questions to experts is dealt with by CPR 35.6. As is made clear by CPR 35.6(3), an expert's answers to questions put in accordance with the procedure there set out shall be treated as part of the expert's report. There is, unsurprisingly, no provision to the effect that the questions put to the expert, or any material appended thereto on which the expert is asked to comment, acquires the status of evidence of the truth of its contents or indeed any evidential status by virtue of having been so deployed; it is simply part of the corpus of material upon the basis of which the expert has been invited to express an opinion. Nor is it anything to the point that neither Ms Gee nor the claimant took issue at the time with what was stated in Mr Ashton's report. The claimant had no occasion to challenge it and Ms Gee no doubt would have had no reason to think that the facts stated by Mr Ashton were inaccurate.

In any event, all this discussion is, in my view, somewhat academic, since Mr Ashton does not in his report offer a view on the critical question whether an intending purchaser would in September 2009 have requested that the X-rays traditionally accompanying a purchase or an intended purchase extend on this occasion to X-rays of the horse's back. The evidence of the jointly instructed expert Ms Gee has from the start been only that X-rays commissioned on purchase "might possibly" extend to the back. In her second report, having considered Mr Ashton's report, she maintained that opinion, adding (consistently with what she had first said) that it is not common practice to have the back X-rayed.

In those circumstances, it would not be a fair or safe inference from the penultimate sentence of Mr Ashton's report that he necessarily considers that a purchaser in September 2009 would have asked for X-rays of the back. He is not addressing that question. There is also the further question whether Mr Ashton is competent to express such a view if indeed he holds it. He is a veterinary surgeon, not, like Ms Gee, a trader in horses. It is to the latter that one looks for the relevant expertise to express a view as to the procedures which would be insisted upon as a condition of a successful transaction.

I might also add that considerations such as these indicate that had Mr Ashton's report by the process suggested by Ms Stonefrost become evidence of the truth of its contents, it would have given rise to all sorts of questions of which there would have been no opportunity to ask Mr Ashton as he was not called as a witness at trial.

I set out below the passage in the cross-examination of Ms Greetham which followed the debate about the admissibility of Mr Ashton's report:

The judge had already observed just before this evidence was given that Ms Greetham is an expert in horse physiology. In her final address, Ms Stonefrost rightly reminded the judge that whilst Ms Greetham indeed had that expertise, she was not called as an expert witness and the claimant had no entitlement to rely upon her evidence as expert opinion evidence. The judge recognised that this was so, but pointed out that Ms Greetham had given clear evidence that the horse was exhibiting no symptoms of back pain when she saw it in September 2009 or in the period before that. That was evidence of fact. I have no reason to think that the judge had lost sight of the status of Ms Greetham as simply a witness of fact when he came to write his judgment later that evening and the following morning. As the judge records at paragraph 22 of his judgment:

I would just add two points in relation to that paragraph of the judge's judgment. First, on my reading of Mr Ashton's report, it looks as though the relevant X-rays of the horse's back may have been carried out after March 2011, although the precise date does not matter. Ms Stonefrost was inclined to agree that my reading of the report was correct and that an error had been made at trial in thinking that the relevant X-rays had been taken shortly after March 2010. The second observation I would make at this stage in fact relates to paragraph 23 of the judge's judgment, which reads:

So far as concerns the lung condition, it is not clear that this was the reason why the horse was put down. In his second witness statement the defendant said at paragraph 1.9 that it was as a result of Mr Ashton's report that the horse had to be put down. That report deals only with back injury. It is true that in his oral evidence at the hearing, the defendant also said:

It is unclear from that evidence whether the discovery concerning the lung condition was made in 2010 or 2011. Again, it does not matter: this evidence came too late to be relied upon in relation to the value of the horse in September 2009 and no reliance was placed upon it by Ms Stonefrost at trial. The judge was not asked to find that an intending purchaser in September 2009 would have discovered a lung defect, and there was absolutely no material on the basis of which he could have been invited to make such a finding. No one invited Ms Gee to consider that possibility either.

The judge's critical findings are set out in paragraph 35 of his judgment, but I will first reproduce paragraph 28 in order to put the former into context. At paragraph 28, the judge said:

In my view, what the judge effectively found at paragraph 35 of his judgment was that, in the light of the horse's record of success in the three years he was ridden by the claimant, and in the light of the circumstance that he was exhibiting no symptoms of back pain, it was not demonstrated on the balance of probability that an intending purchaser in September 2009 would have taken the uncommon step of asking for X-rays of the horse's back. There would have been no reason to do so; There was nothing to alert an intending purchaser to take this unusual step. The judge had ample evidence on the basis of which he could come to this conclusion.

Before us, although not before the judge, Ms Stonefrost has suggested that there was material in Ms Gee's first report which ought to have led the judge to conclude that an intending purchaser would indeed have been sufficiently concerned about the horse's performance prior to 23 September 2009 to insist upon X-rays of the spine. In support of that submission she showed us, first, messages sent to Ms Gee by the Claimant’s solicitors after receipt of her first report. The first of those messages from Messrs Jolliffe reads as follows:

Then, two weeks later, on 1 November 2011, a further message was sent by Messrs Jolliffe which read:

Those messages elicited a perhaps somewhat indignant response from Ms Gee in an email of 1 November 2011. In that email she said this:

Building on the statement that Ms Gee had not considered any events that took place after the date of the valuation (i.e. after 23 September 2009), Ms Stonefrost submitted that it is a fair inference that the videos of the horse's performance to which Ms Gee refers in her first report must have been filmed of him competing in the period prior to 23 September 2009. Thus, she suggested, the instances of the horse failing to lift his left leg as high as he should have done, leading to nasty falls, must all have occurred prior to September 2009.

I am afraid that I am not prepared to draw this inference. In her description of this material, written in October 2011, Ms Gee says that it is not easy to see why the horse behaves (and I emphasise the present tense) in such a way occasionally. The particular nasty fall to which Ms Gee refers, which is apparently well documented, occurred at Lexington in April 2010, as I have already mentioned. In my view, Ms Stonefrost places more weight upon Ms Gee's indignant email than it can fairly bear. In any event, it would not be fair to derive the inference suggested when (i) the trial judge was not invited to draw it, and (ii) it was never put at trial to either the claimant or to Ms Greetham that the horse whilst under their care manifested a tendency not to lift his left leg sufficiently high, which in turn might have been indicative of a back problem.

I also bear in mind that the reason why the ride was taken away from the claimant was because it was thought by the defendant and his wife that the horse would have a better chance of achieving a place in the Olympic team being ridden by Mr Townend. There is no suggestion that at this stage either the defendant or his wife had any concerns whatsoever about the horse's health or condition.

In so far as it is relevant, the subsequent history of the horse bears out the reasonableness of the judge's view that an intending purchaser in September 2009 would not have taken the uncommon step of commissioning an X-ray of the horse's back. Although back pain was investigated as from 11 December 2009, and treated as from 8 March 2010, the horse continued to participate in competitions successfully throughout 2010 (notwithstanding the serious fall at Lexington in April) and into 2011. Indeed, the horse was ridden by Mr Townend on the defendant's behalf on ten occasions between 13 March and 6 August 2010 and on five occasions in 2011. The defendant in his oral evidence at trial spoke of the success achieved with the horse by Mr Townend in 2010 (see bundle 1 page 164 at lines 2 to 6).

I also note incidentally that Mr Ashton seems to be saying in his report of 21 October 2011 that surgery in 2011 alleviated the back pain completely. That too potentially gives rise in my mind to questions which would have needed to be asked of Mr Ashton had the defendant been in a position to rely upon his report as evidence of the truth of its contents.

However that may be, and whatever the relevance of the subsequent history, the judge was in my view amply entitled to come to the conclusion which he did concerning the likelihood of back X-rays being conducted in connection with a sale of the horse in September 2009. It was common ground at trial that the assessment of the value of the horse as at 23 September 2009 had to be conducted by reference to the outcome of a putative sale. Likewise before us, Ms Stonefrost accepted that the value of the horse as at 23 September 2009 is not some abstract concept of true as opposed to artificial value, but rather the price which would have been achieved by a putative sale on that day. That is the orthodox approach, and it was in respect of that exercise of valuation that the single joint expert was instructed to provide opinion evidence. In order to apply that unchallenged opinion evidence to the facts of the case, the judge had to make a finding as to whether the back defect would, on the balance of probability, have been discovered on a sale in September 2009, a requirement which he identified clearly at an early stage of the trial. In my view, the judge reached an entirely justified and wholly unexceptional conclusion on that point, from which it followed that the appropriate award of damages was £42,500.

I would reiterate that in any event the only alternative open to the judge was an award of £30,000 as it was the jointly instructed expert's unchallenged evidence that had the back defect described by Mr Ashton been discovered the outcome would have been a 25% reduction in the sale price achieved. I am afraid that I did not follow the basis upon which Ms Stonefrost faintly argued that she could contend on this appeal for a nil value.

In reality, this is a case in which the defendant simply did not accept the opinion of the single joint expert that revelation of the back problem in September 2009 would have led to only a 25% reduction in the price achieved. The remedy in such a case, however, is for the disaffected party to apply to the court for permission to instruct another expert with a view to obtaining a report which will enable it to make a decision whether or not there are aspects of the report of the single joint expert which it wishes to challenge. The procedure is described in the notes to CPR 35.7 at paragraph 35.7.6. In an appropriate case, permission may be given to the dissatisfied party to adduce its own expert evidence. Nothing of that sort was done here, and it is not open to Ms Stonefrost to challenge the opinion of the single joint expert, leaving on one side the anterior difficulty that no such challenge was essayed at trial.

I would dismiss the appeal.

LORD JUSTICE McFARLANE: I agree.

LORD JUSTICE SULLIVAN: I also agree.