Dr Prithvi Raj Rao v. Neville William White and Others

CACV000066/1976

Coram: Briggs, C.J., Pickering, J.A. and Leonard, J.

Date of Judgment: 8th March, 1978.

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JUDGMENT

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1. In this appeal the appellant seeks an order for re-trial on the basis that the learned trial judge has misdirected himself on questions of fact ancillary to the two fundamental issues of fact which he had to decide and that these misdirections so coloured his approach to the all important question of the credibility of the appellant on the one hand and of the principal witness for the respondents on the other that he failed to make a true assessment.

2. The case commenced as an action by the respondents for the sum of $138,970.55 due for money paid and work done by them as stockbrokers for the appellant in and about the purchase of stocks and shares and for brokerage and interest. To this claim the appellant had no real defence and his case took the form of a counterclaim. This was in essence (i) that the respondents had failed to obey an order allegedly given to their representative, a Mr. Robins in February 1973 by the appellant that all his holdings should be sold, and (ii) that they had failed to account to him for the proceeds of sale of a parcel of 20,000 shares in Kao Shing Co. Ltd. The respondents' defence to the counterclaim was that no unequivocal order for sale had ever been given and that the Kao Shing shares had been delivered to the appellant.

3. The appellant had in fact been speculating "on the margin" on the Hong Kong market and had had dealings in many shares with the respondents and other stockbrokers during the relevant period, a time at which the market was extremely volatile. He claimed that the order to liquidate his holdings was given at a time when the market was just past its zenith, namely, at the end of February 1973. After that date the market went into a decline, and although it rallied slightly from time to time it never recovered. The appellant's holdings were later sold at a substantial loss. It is history that the appellant was not alone in misfortune at this time.

4. The task facing the learned trial judge can, for our purposes, be simply stated. It was to decide whether the appellant had, as plaintiff in the counterclaim, satisfied him on a balance of probability, firstly that the appellant had instructed the respondents as he claimed to have done and, secondly, that the respondents had not delivered to him the parcel of 20,000 shares in Kao Shing Co. Ltd. Both issues were questions of fact dependant in large measure on the trial judge's assessment of the credibility of the witnesses. Although the issues may be simply stated the background was complicated, firstly, because during the Period in which the appellant was speculating on the stock exchange so too were thousands of others so that the facilities of all stockbrokers were strained to the limit, they were understaffed and working all hours of the day and night to meet the demands of their clients and the stock exchange had well nigh ceased to operate as a place of investment and become a gambling resort. Almost all speculators operated on margin, buying and selling was frantic. The respondents' resources were therefore stretched so that when the case came for trial, although the fever had abated it had left its marks on their records. Again, the appellant did not produce any records kept by him of his dealings and originally alleged that besides the Kao Shing shares the respondents had failed to account to him for various other parcels of shares in World Wide Co. Ltd., Wah May and Michaelson. These allegations were ultimately disposed of but they complicated the hearing so that a case originally fixed for four days lasted for ten days. The record of oral evidence runs to some 700 pages and exhibits bestrewed the court as thickly as autumnal leaves in Vallombrosa.

5. The case for the appellant as advanced to us was that a retrial should be ordered firstly, because of a finding by the trial judge that the appellant had, recklessly, complained that a rough statement of account supplied to him by one of the respondents was inaccurate when, as conceded by counsel for the respondents, the rough statement was inaccurate, so that the complaint was correct and, secondly, because of a finding that the appellant had like wise recklessly, alleged that the 20,000 Kao Shing shares had been purchased without his instructions and had abandoned that claim when in fact the claim had not been abandoned. There were, in the grounds of appeal, further complaints as to the trial judge's approach to other subsidiary issues which seem to be so minor or so arguable that they cannot be said to have resulted in misdirections and I need not outline them.

6. The case put forward for the appellant on the two matters I have outlined was that the findings of recklessness having been made they so polluted the judge's reasoning on the essential issues as to necessitate a retrial. I think this is putting the matter far too high. By an application of Derry v. Peek⁽¹⁾ Mr. Henry seeks to show that the judge was imputing fraud in these instances but what he said was that the two claims were put forward "recklessly". The relevant passage reads:-

"It" (the appellant's criticism of the queried 'account') "was typical of various unfounded allegations carelessly and recklessly (if not worse) made by the defendant from the beginning of the proceedings. The abandoned allegation that the plaintiff purchased 20,000 Kao Shing shares without instructions is the earliest example."

7. This passage must be read in its context that being a finding that the appellant had exaggerated his annoyance at the terms in which the letter enclosing the account was couched. Even on the assumptions (i) that counsel for the respondents was correct in conceding that the 'account' was inaccurate and (ii) that the judge was wrong when he concluded that the deletion from the counterclaim of the allegation concerning the Kao Shing shares amounted to abandonment of that allegation the passage does not impute deliberate dishonesty. For the judge made clear when the appellant was giving evidence that what he meant by a reckless allegation was one made without due investigation. Due investigation would have revealed that at that time the appellant was heavily indebted to the respondents and therefore had no great cause for annoyance. Again, on the record there is abundant evidence of "unfounded allegations carelessly and recklessly made".

8. It is necessary when assessing how greatly the judge's view of the credibility of the appellant was affected by his conviction that the appellant was guilty of fraud in the Derry v. Peek⁽¹⁾ sense to bear in mind that the fraud of which he was convinced was fraud in the proceedings rather than fraud giving rise to proceedings. The judge was in effect holding that the appellant was lying about his annoyance. He could, without possibility of challenge, have stigmatised as "fraudulent" other allegations made by the appellant.

9. I am fully satisfied that the general picture disclosed by the record is of a speculator who did not get out of a falling market in time to avoid loss, even although he was encouraged to get out rather than of a speculator who (in pique, as he would have it, rather than apprehension) had ordered immediate sale. His account of having ordered Mr. Robins to sell when Mr. Robins was in hospital and of having promised to repeat the order when Mr. Robins had recovered is in itself unlikely. His account of the telephone call of 29th March, 1973 repeating the order is unconvincing. That it happened to be overheard by a Mr. Thakore (who had introduced him to the respondents and who had himself lost heavily in speculations made through them) I find quite incredible. Again, his inaction during the fortnight following the 29th March, 1973 when the market was falling rapidly is wholly inconsistent with his case. Counsel for the respondents has brought to our attention many instances of prevarication by him, for example, his varied accounts of the records he kept or did not keep of his speculations; his receipt and sale of the shares in World Wide; the date of his departure from Hong Kong for Japan. What is to my mind most inconsistent with his case is that no enquiry or complaint was made by him before he left for Japan or on his return from Japan on 23rd April, 1973 or for a considerable time thereafter. No such contemporaneous inconsistencies in Mr. Robins' behaviour have been drawn to our attention and such contemporaneous documentation as exists is consistent with his denial of any peremptory order to sell.

10. I am quite convinced by such parts of the record as were opened to us by counsel for the respondents that the decision of the trial judge was the correct one and that no substantial wrong or miscarriage has been occasioned by the misdirections of which complaint is made. The appellant has not lost a chance of success on either of the issues of fact because of the misdirections. He had not a chance to be lost. This case depended purely and simply on fact and was not a case in which the trial judge was in doubt as to the credibility for he gave judgment for the respondents immediately on the conclusion of the case. The judgment with which we have been dealing was a rationalization, written later, of his belief in the credibility of Mr. Robins and of his disbelief of the appellant and his witnesses. It was not a reserved judgment. Misdirections affecting credibility might, in a reserved judgment, assume greater importance than they would in reasons formulated, as these were, after the event.

11. Be that as it may, what the appellant seeks is a retrial and as I am quite satisfied that on a retrial he would fare no better than he has done, I would dismiss this appeal, with costs.

Representation:

(1) (1889) A.C. 337.