Appeal – Question of fact – Loan agreement – Judge deciding that sum paid to appellant son by second respondent company controlled by first defendant father was interest free loan rather than gift – Appellant appealing on pure question of fact – Whether judge reaching wrong conclusion on evidence – Appeal dismissed
The second respondent was a company under the control of the first respondent, the appellant’s father, who had acquired considerable wealth in the oil business in Nigeria. The appellant wished to purchase an apartment in Lugano. The sum of CHF 4 million was paid by the second respondent for the purchase; and a further CHF 2 million for works to that property.
A dispute arose whether the payment was an interest-free loan rather than a gift. A three-page document purported to evidence a loan, with each page bearing the signatures of the parties. Each party instructed an expert to verify the authenticity of the appellant’s signatures. The judge found, on the balance of probabilities, that the payments were interest free loans and not a gift. The two main factors supporting that conclusion were, first, that all arrangements were put in place for a loan agreement to be signed by each of his sons in the context that the first claimant was at the time obsessed with protecting assets against possible claims by his daughters-in-law; and secondly, the preponderance of the expert evidence suggested that it was likely that the loan agreement was signed by the appellant: [2021] EWHC 2143 (Ch). The appellant appealed.
Held: The appeal was dismissed.
(1) The approach of an appeal court to an appeal on a pure question of fact was a well-trodden path. An appeal court should not interfere with the trial judge’s conclusions on primary facts unless it was satisfied that he was plainly wrong. The adverb “plainly” did not refer to the degree of confidence felt by the appeal court that it would not have reached the same conclusion as the trial judge. It did not matter, with whatever degree of certainty, that the appeal court considered that it would have reached a different conclusion. What mattered was whether the decision under appeal was one that no reasonable judge could have reached.
An appeal court was bound, unless there was compelling reason to the contrary, to assume that the trial judge had taken the whole of the evidence into his consideration. The mere fact that a judge did not mention a specific piece of evidence did not mean that he overlooked it. The validity of the findings of fact made by a trial judge was not aptly tested by considering whether the judgment presented a balanced account of the evidence. The trial judge had to consider all the material evidence (although it need not all be discussed in his judgment). The weight which he gave to it was however pre-eminently a matter for him.
An appeal court could therefore set aside a judgment on the basis that the judge failed to give the evidence a balanced consideration only if the judge’s conclusion was rationally insupportable. Reasons for judgment would always be capable of having been better expressed. An appeal court should not subject a judgment to narrow textual analysis. Nor should it be picked over or construed as though it was a piece of legislation or a contract: Piglowska v Piglowski [1999] 1 WLR 1360, McGraddie v McGraddie [2013] 1 WLR 2477, Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5, [2014] FSR 29, Henderson v Foxworth Investments Ltd [2014] 1 WLR 2600, Elliston v Glencore Services (UK) Ltd [2016] EWCA Civ 407; JSC BTA Bank v Ablyazov [2018] EWCA Civ 1176, [2019] BCC 96; Staechelin v ACLBDD Holdings Ltd [2019] EWCA Civ 817, [2019] 3 All ER 429 and Perry v Raleys Solicitors [2020] AC 352 applied.
(2) Similar caution applied to appeals against a trial judge’s evaluation of expert evidence. Where facts were disputed it was for the judge, not the expert, to decide those facts. Even where expert evidence was uncontroverted, a trial judge was not bound to accept it: Tribunals were free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense. Whether any positive significance should be attached to the fact that a person had not given evidence, or to the lack of contemporaneous documentation, depended entirely on the context and particular circumstances: Kingley Developments Ltd v Brudenell [2016] EWCA Civ 980, Royal Mail Group Ltd v Efobi [2021] 1 WLR 3863, Byers v Saudi National Bank [2022] 4 WLR 22 and Griffiths v TUI (UK) Ltd [2022] 1 WLR 973 applied.
(3) Under normal circumstances in English law, where A received money from B the money was prima facie repayable unless B could establish that the money was a gift. In a case like the present, the position was complicated by what remained of the presumption of advancement between father and child. The position was further complicated because the money came from the second respondent rather than from the first respondent personally. The fact that the money came from a company rather than directly from a parent seemed to weaken any presumption of advancement.
That species of presumption was a factual presumption. Where the presumption applied, it was rebuttable. The important point was that, in deciding whether the presumption had been rebutted, what the court looked for was the subjective intention of the putative donor which, in most cases, would be determinative. Thus, the question was whether the putative donor had an intention to make a gift. There were no rigid rules about what evidence was admissible to decide that question.
It was not for an appeal court to come to an independent conclusion as a result of its own consideration of the evidence. In this case, the judge was entitled to reach the conclusion that he had.
(per curiam) The present appeal demonstrated many features of appeals against findings of fact: It sought to retry the case afresh; rested on a selection of evidence rather than the whole of the evidence; sought to persuade an appeal court to form its own evaluation of the reliability of witness evidence when that was the quintessential function of the trial judge; and sought to persuade the appeal court to reattribute weight to different strands of evidence and concentrate on particular verbal expressions the judge used, rather than engaging with the substance of his findings.
Adrian Beltrami QC and Dominic Kennelly (instructed by Taylor Wessing LLP) appeared for the appellant; Andrew Holden and James Bradford (instructed by Grimaldi SL LLP) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Volpi and another v Volpi
