Evidence - Breach of contract

Camertown Timber Merchants Ltd and another v Sidhu and others: Court of Appeal, Civil Division (Lords Justice Ward, Moore-Bick and Rimer): 8 September 2011

The claimants were a qualified structural engineer, B, and a builder's merchant company, CTM, of which B was managing director. The defendants were an unqualified accountant, S, and S's accountancy business, K. K provided accountancy and bookkeeping services to B and CTM. S confided in B his wish to find a suitable property which could be demolished and then re-built as a new family home. B was introduced to a property by a property agent for a finder's fee of £10,000.

B told S that the property was available and suitable for re-development and S purchased it. CTM supplied the materials for the building project which was carried out by workmen who were supplied by B but paid directly by S. Problems arose over payment for the materials. The claimants brought a claim against S claiming £40,892.53 in relation to the supply of building materials and £20,400 in respect of project management fees.

The defence to the claim alleged that the goods were supplied to K and that it was agreed that K would set off the fees owing to it for the accounting services rendered to CTM and others. K issued its own claim against CTM for £25,215.50 accounting fees. In its defence CTM pleaded an agreement to set off the finder's fee. The judge noted the absence of any clear evidence in writing of the agreements between the parties.

He found that he was unable to place great confidence in any of the witnesses and noted that he had had to 'evaluate the probabilities on the basis of much documentary evidence that was capable of more than one interpretation'. CTM was awarded £40,900.53 and B was awarded £4,500. K was awarded £29,022.51, leaving a balance in favour of the claimants of £16,378.02. He concluded that there should be no order as to costs. The claimants appealed.

The principal issue that fell to be determined was whether the judge had failed adequately to try the issues before him. The appeal would be dismissed.

It was recognised that the exigencies of daily court room life were such that reasons for judgment would always be capable of having been better expressed. It was established law that those reasons had to be read on the assumption that, unless he had demonstrated to the contrary, the judge had known how he should perform his functions and which matters he should take into account (see [35] of the judgment).

In the instant case, having come to the conclusion that both parties were unreliable and the documentary evidence equivocal the judge could not be at fault for not condescending into great detail when giving the parties short shrift. Although the substantive judgment could and perhaps should have been more fully expressed, the substance of it was discernible and beyond challenge.

The judgment on costs was equally short and an express reference to conduct as an important factor which the court should consider when deciding what order to make about costs would have been expected. However, an order for costs after such a trial was the paradigm example of the exercise of discretion. The judge had not misdirected himself or, in the exercise of his discretion, exceeded the generous ambit within which there was reasonable room for disagreement (see [13],[36] of the judgment). Piglowska v Piglowski [1999] 3 All ER 632 applied.

Gabriel Buttimore (instructed by Teacher Stern LLP) for the claimants. David Holland QC (instructed by CKFT solicitors) for the defendants.