The Court of Appeal in Natwest Markets Plc and another v Bilta (UK) Ltd and others [2021] EWCA Civ 680 made an unusual decision to order a re-trial. This is a rare example of a situation where an appellate court has expressed serious concerns as to findings of fact made by the judge of the lower court. The basis for this decision was the misgivings the Court of Appeal had as to the judge’s ability to adequately address and evaluate evidence that had been presented at trial following a 19-month delay in delivering judgment.
Background
The liquidators of a number of companies caught up in a complex MTIC (“missing trader intra-community”) VAT fraud, involving the purchased and sale carbon credits, were pursuing RBS (formerly Nat West) for dishonestly assisting in the fraud, which had resulted in a loss to the Inland Revenue of in excess of £44m. The allegation against RBS was that its traders had knowingly participated in (or had turned a blind eye to) fraudulent trading.
These allegations were strongly denied by RBS. However the judge, Mr Justice Snowden, a High Court judge in the “Financial List” (the division of the High Court dealing with disputes involving financial services), determined that the RBS traders had acted dishonestly, and therefore RBS, as their employer, should be held vicariously liable for their actions. Although the trial of this case took place in June and July of 2018, it was not until 10 March 2020 when judgment was handed down, therefore some 19 months after the trial had concluded.
RBS appealed the decision to the Court of Appeal, seeking a set aside the judgment on the basis that the judge had failed to take into account relevant factors in his decision. Further, owing to the time that had elapsed between trial and delivery of the judgment, it could not be assumed that the judge had properly considered such factors in his deliberations.
The Court of Appeal allowed RBS’ appeal and took the unusual step of ordering that the matter be re-tried by a different judge. Unlike the lower court, the Court of Appeal did not have the advantage of hearing live evidence. In normal circumstances, it would assume that the trial judge had given due weight and consideration to all the evidence that had been put before him. However, this was a fact-heavy case dependent on oral evidence of witnesses (whose testimony related to events that were not always supported by documentary evidence). The Court of Appeal therefore considered that there was a clear danger posed by the delay between the hearing of live evidence and delivery of the judgment, that brought into question the thoroughness and credibility of that judgment.
Delay in and of itself is not a ground for appeal (and many practitioners will have experienced – and had to live with - delay in the court handing down judgment, often due to a judge’s heavy work schedule). However, in circumstances where the judge’s treatment of evidence was of paramount importance to the outcome of the case, and the judgment had seemingly overlooked key documents and events when making particular findings (which had led to the Court of Appeal reaching a very different view of the facts), alarm bells were raised by such delay. Had the judgment been delivered more quickly, there was an assumption that the key documents and evidence would have been factored into the judgment (even if they were not specifically referred to), but this assumption had been severely eroded by the delay.
Comment
Given the particular facts of the case, it is perhaps of no surprise that the Court of Appeal has ordered a re-trial. The general rule is that a court should hand down its judgment within three months of the trial closing. In particularly long and complicated trials, overseen by judges with a very busy caseload, this “deadline” can be missed. However, delays of the length experienced in this case can lead to injustice and risk undermining the confidence that litigating parties, both domestically and internationally, have in the legal process and the judicial system.
Catherine Penny