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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Inntrepreneur Estates Ltd v Hollard & Hollard [2000] EWCA Civ 246 (31 July 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/246.html Cite as: [2000] EWCA Civ 246

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Case No: 00/0594/A2

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIS HONOUR JUDGE RICHARD WALKER.
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 31 July 2000.

37. The preliminary meeting between the Hollards and Mr Flavin took place in December 1990. At this stage the McGuigans were still tenants, and trying to assign their lease for a substantial premium (originally £250,000), although the landlords had given by 19^th November 1990 decided to instruct solicitors with a view to forfeiture on 1^st December 1990. It is common ground that at the meeting Mr Flavin told the Hollards that turnover at The Angel had previously been much higher, in the 600s and 700s, than it was in late 1990. This was correct. Mr Flavin was in a position to give such figures, because he was able at any time to extract from computer records the annual turnover figures for each of the three previous years ending with September as well as the annual turnover figure for the most recent past month (which would be available on the computer some during the course of the ensuring month). The computer could also (from a date in or about March 1991 when the system was updated on moving offices) produce a detailed month by month print-out of twelve month barrelage totals.

38. Intrepreneur's original case, based on Mr Flavin's belief derived from his reconstruction of events, was that the next meeting took place in late April 1991, rather than in March as the Hollards alleged. Mr Flavin said that he believed it occurred after he had obtained a full month by month barrelage print-out for the last two years ending with February 1991 and completed a profit and loss calculation on 23^rd April 1991 to assess the rent which might be claimed. The barrelage print-out was taken off the computer at 1528 hours on 23^rd April 1991 (although Mr Flavin pointed out that he may have worked on it on the computer previously). The profit and loss account and rent assessment is timed at 1858 hours on 23^rd April 1991. Both documents took as appropriate an MPO of 450 barrels. The Judge found that Mr Flavin did not have authority himself to fix the rental which might be agreed with any tenant, and that "the practice at Inntrepreneur was for the consultant (i.e. Mr Flavin) to prepare first a draft set of profit and loss accounts for the pub which contained his assessment of its likely future trading potential (including turnover and profit)", and thereafter for either him or his line manager (Mr Wheeler) to "prepare a proposal including the suggested rent and MPO which would be presented to a Rent Panel comprising senior management ..." . Mr Waters suggested before us that this practice could not apply to the present lease to the Hollards, being one of the new 20-year leases which Inntrepreneur had resolved to introduce. But there is no basis for this submission. The Judge's findings (reflecting the evidence) indicate, as one would also expect, that the practice covered longer as well as shorter leases.
39. This practice would suggest that no firm rent proposal could have been put to the Hollards until some date after 23^rd April 1991. There was nothing to suggest that Mr Flavin had prepared any previous, undisclosed profit and loss account. The marketing of The Angel had been in the hands of Miss Vickery (by trial Mrs Moreland). Using the old computer system, she had on 1^st March 1991 produced a profit and loss account which led to a proposed rent of £57,247 p.a., based on a barrelage of 535. There was no suggestion that any such rent based on any such barrelage was ever put to the Hollards. When the barrelage print-out dated 23^rd April 1991 was taken off the computer system, it still bore her name. Mr Flavin's name was entered, no doubt by himself, and appeared for the first time on the profit and loss account and rent assessment of 23^rd April 1991.
40. As the Judge went on to hold, a first rent panel on 2^nd May 1991 "approved a proposed rental for The Angel of £50,000 for the first five years, and an MPO of 400 barrels, apparently reduced by the Panel from 450 barrels". But "at a further Rent Panel on 21^st May 1991, approval was given for a concesssion[ary] rent of £25,000 for the first year of the lease". Inntrepreneur's case was and is that all these documents and rent panel approvals related to the proposed letting to the Hollards, that Mr Flavin had had a further meeting, on Wednesday 15^th May 1991, with the Hollards to discuss the proposal authorised by the first rent panel and that notes (in Mr Flavin's writing) made during that meeting appear written on the barrelage print-out. According to Inntrepreneur, these notes relate to and evidence negotiations about rental in the light of the barrelage figures. They go particularly to the concessionary rental put up to and agreed by the second rent panel on 21^st May 1991. The inevitable inference, Inntrepreneur suggests, is that the figures in the barrelage print-out were shown or communicated to Mr Hollard and that they led him to seek and obtain the concession of a half rent for the first year. The further concession of a MPO of only 40 barrels in the first three months of the lease (reducing the effective MPO for the first lease year to only 340 barrels) must also have reflected awareness at or about the end of June 1991 that the barrelage was declining (as it continued to do).
41. The Hollards' case was that there was no meeting either in April or between the two rent panels in May 1991. At a meeting in March 1991, a rent of £50,000 was negotiated, on the basis of the alleged representation, and Mr Flavin "said that he would set the MPO at 400 and that would not be a problem". According to Mr Hollard, Mr Flavin said at this meeting that he had already discussed the rental with his directors. Mr Hollard suggested that the first two years should be at half rent or at reduced rent, and Mr Flavin said that he would put this to his board. There was a very short meeting at the very end of May 1991, where a concessionary half rent for the first year was proposed by Mr Flavin and accepted, and the Hollards gave their solicitors' name. Mr Hollard's witness statement said in relation to this last meeting that "I cannot think now why we needed to go to Bristol at all for this". They were, they said, never shown the barrelage print-out and never given the figures to February 1991 which it showed.
42. When giving evidence Mr Flavin said that he had now got to the position that he believed that there had been a second meeting in March, rather than at the end of April 1991. He said in chief:
"What I believe would've happened in March is that I would be telling Mr and Mrs Holland that I actually received instructions to now let the pub because Mr McGuigan had gone. That meeting would have been to make sure that the knowledge that I have imparted in the first meeting about the Inntrepreneur lease was actually understood because a lot was happening with our organisation at that time ....
....
The course of events as I believe them to be is that in March we started seriously talking about the letting of the Angel. The business plan [that is a plan produced by the Hollards, but not available at trial] would be dealt with by Mr and Mrs Hollard. I would be doing my assessment of what I believed to be the average maintainable trade, the potential business. I believe that the meeting in May was the meeting that actually finalised our discussions about the terms of the lease.
....
I would have given all the information that I had about the pub and that would primarily be the barrelage ....
On that occasion, would details of the rent have been negotiated?
.... No, I think we may have discussed it. I think there may have been some positioning going on at that stage but I hadn't actually put my proposal to our panel and therefore I wouldn't be able to speak with any certainty about what our expectation would be.
Might you have discussed Mr McGuigan and his trading experience on that occasion?
Yes, yes.
And you recall discussing that?
I can recall discussing barrelage figures in our meetings. .... Also I'm sure at that stage we would have talked about the possibility of Mr McGuigan buying some beer outside of the tie."
43. Mr Flavin stood by his belief that there had been a further meeting in May 1991 between the dates of the two rent panels, at which he used the barrelage summary and profit and loss account to negotiate a definite rent with the Hollards, including the concessionary first year's rental.
44. As these passages make clear, and as Mr Flavin acknowledged, he had little if any specific recollection of any meetings with the Hollards and was basing himself on his usual practice and reconstruction. None of the witnesses had, or could really be expected to have had, any very reliable memories. The Judge, as I have said, described their memories as ranging from the partial (that is, the Hollards) to the non-existent (that is Mr Flavin). He later said: "nor do I regard any of these three witnesses as particularly good historians".
45. Then, as to the Hollards, he said:
"On the face of it, one would think it likely that Mr and Mrs Hollard, for whom meetings were less routine than they were for Mr Flavin, would have a clearer recollection of what took place. To a degree this is true, but their perception of dates of the meetings was actually, in my judgment, little more than impressions deriving from, for the first meeting, Mrs Hollard's recollection of Christmas decorations in the hotel lounge where they met, and, for the next meeting, the normal pattern of fixtures for the Newquay Arms Darts Team.
Mr Hollard, in particular, did not come across as a man of precise mind or recollection. Nor did he always express himself with clarity. He is a patently honest and decent man and was doing his best to remember events and conversations, but my assessment that he is a poor historian as to matters of detail, and that futhermore, despite his proven business abilities, he is not a man who would have observed the nuances of what was said to him, nor would he even have pressed Mr Flavin particularly hard on matters of detail."

46. As to Mrs Hollard, the Judge said that, although she was as a trained social worker potentially better equipped to recall the events with greater clarity, hers was essentially a supporting role only in discusssions and her knowledge of the licensed trade was only that picked up from her marriage, and that:
"Moreover, by the time she gave evidence, she had heard the examination and cross-examination of her husband, including those points at which he had clearly not said the things which supported his pleaded case. She was plainly an honest witness but I am satisfied that there was an element of sub-conscious making good of some of his deficiencies which again prevents me from treating her as an entirely reliable historian."

47. Thus the Judge rejected her evidence that Mr Flavin had in December 1990 positively represented that Mr McGuigan was buying out of tie, and about the extent to which Mr Flavin represented The Angel to be suitable for live entertainment. In relation to another of the representations which the Hollards were alleging, the Judge found that both the Hollards had confused their memory of matters discussed with Mr Flavin and conflated them into a proposition that Mr McGuigan was leaving because he had been buying out of tie. Further, he specifically rejected evidence by Mr Hollard of reluctance to be persuaded into taking on the lease of The Angel:
"Contrary to parts of his evidence, Mr Hollard had, in my judgment, become keen to take on The Angel and had an understandable confidence that he could make a success of it, just as he had of the Newquay Arms"

48. Mr Hollard was in fact keen to move back to his home area of Poole.

49. In these circumstances, the Judge faced self-evident difficulty in relying on either side's oral evidence to resolve the central issue before him. In the end he said this on the question of the number of meetings and whether there had been any meeting on or about 15^th May 1991:
"It is not necessary for me to reconstruct these meetings fully, nor would it be possible for me to do so given the state of the evidence before me. All I really have to do is to determine whether certain specific recommendations were made at certain specific months during the negotiations. I can however say that I have finally concluded that on the balance of probabilities Mr and Mrs Hollard are more likely to be right that there were three meetings rather than four, and that these took place in December 1990, March 1991 and May 1991. The last of these was, I find subsequent to the second Rent Panel meeting (Mr Flavin effectively accepts this). I reach this conclusion on the basis that the Hollards are indeed more likely to be right because these meetings were not the routine affairs that they were for Mr Flavin. Moreover, I have concluded that it is improbable that Mr Flavin is right in his honest belief that he must have shown [the 23^rd April barrelage print-out] to the Hollards. Confident though I am satisfied that Mr Hollard was of his ability to build up the trade of The Angel, it is I conclude improbable that had he seen the dramatically plunging figures, he would have been willing to sign an agreement imposing upon him an MPO of 400 barrels."
50. This was a conclusion reached on the basis of only two stated reasons. As to the first, the Judge himself had commented that it was in his view only "to a degree" true that it was likely that the Hollards, for whom meetings were less routine than they were for Mr Flavin, would have a clearer recollection of what took place. Further, he had in other respects found the Hollards inaccurate though honest witnesses.
51. In relation to the second reason, in effect the Judge was concluding that Mr Flavin must have been involved in a (on the face of it unlikely) muddle and so have misrepresentated the position because it was, in his view, even less probable that Mr Hollard would have gone ahead to sign an agreement to lease The Angel with an MPO of 400 barrels if he had been aware of the actual barrelage figures for beer sold within tie up to February 1991. This assumes however that Mr Hollard would have taken the most recent month's figure of 371 barrels at face value. The Judge omitted here to make any mention of two important points arising from Mr Hollard's own evidence.
52. First, although the Judge rejected the Hollards' case that Mr Hollard was told in December 1991 that Mr McGuigan had then been buying out of tie, Mr Hollard also gave evidence (TR2 p.7B-E) that he was told in March 1991 that Mr McGuigan was buying out of tie (in other words from brewers or suppliers other than Ushers Brewery whose barrelage figures would not therefore include such purchases), and it became effectively common ground that Mr Flavin had confirmed this as at least a possibility. Anyone seeing the barrelage print-out or knowing the figures on it (as Mr Hollard on Inntrepreneur's case did) would in fact have appreciated that the continuing fall in barrelage through December 1990 and the first two months of 1991 was only really consistent with buying out of tie in that period (during which Mr McGuigan was aware that his time as tenant was likely to be coming to an end). The monthly falls from November 1990 were 50, 19 and 36 barrels. These figures must be read cumulatively and must have constituted the bulk if not all of the public house's total turnover for the months a year previously (December 1989, 1990 January and February 1990). If Mr McGuigan was selling any substantial quantities of beer at all (as he clearly would have been) in December 1990 and January and February 1991 he must have been buying it substantially out of tie. (Consistently with this, the detailed monthly brewery print-out for January and February 1991 in fact shows no purchases by him from Ushers Brewery at all in those months.)
53. Secondly, Mr Hollard said that guest beers could also be expected to add significantly to the barrelage. Mr Hollard's own evidence was that one could, therefore, add 100 barrels or so to Mr McGuigan's total figures. Apart from this Mr Hollard was of course aware that the public house had been in the hands of a temporary licensee - an experience inherently likely to depress barrelage.
54. These points - based on Mr Hollard's own evidence - appear to me to make it far more probable than the Judge recognised that the Hollards should agree to take a lease with an MPO of 400 barrels, in the knowledge of the recent decline in reported barrelage to 371 barrels. Mr Hollard appraisal of the situation was that this meant an actual turnover of around 470 barrels, very considerably in excess of the MPO. When one adds in the fact that he was able to negotiate a concessionary half rent for the year during which he envisaged allowing the public house to "wash its face" before he introduced any major improvements, the Judge's second reason appears to me to lack any substantial force. This is quite apart from the three months concessionary barrelage afforded just before the lease was finally agreed.
55. Thirdly, Mr Hollard was an experienced and previously successful publican, both keen to have The Angel and confident of his ability to improve turnover in due course. The Judge nowhere weighs in the balance the (un)likelihood that Mr Hollard would accept a vague general assurance in March 1991 that current turnover was continuing as in late 1990, and would enter into a lease over three months later in early July 1991 without any more recent figures. He nowhere addresses the (un)likelihood that Mr Flavin, an equally experienced consultant, would make the improbable equation between 427 barrels and 480 barrels (the November 1991 figure). Anyway, as I have pointed out, the Judge was mistaken in taking 427 barrels as the January 1991 figure. It was the December 1990 figure. Even if Mr Flavin had in March 1991 seen no figure for any month later than January 1991 on the computer, the January figure was only 408 barrels. That makes it even less likely that he could in March 1991 have fallen under the superficial misconception that trading was continuing as it had been up to November 1990. Further, the Hollards' case not only postulates that Mr Flavin mistakenly persuaded himself in March that there had been no further decline, but also that he failed to recall this in April or May 1991. The Judge, as I have said, had no doubt about Mr Flavin's honesty.
56. Fourthly, the Judge expressly accepted Mrs Hollard's evidence that she had been deeply concerned about undertaking any minimum purchase obligation, although she could not remember its actual level. In previous public houses they had not had to do so. But, she said, Mr Hollard had re-assured her, reminding her that he had always improved in barrelage. This evidence does not appear to me to point towards the Hollards' case being correct, rather the contrary. On the Hollards' case, they had no reason to think that an MPO of 400 could create any problem at all, since the public house was trading at the 480 barrel level and there was another 100 or so barrels on top of that to add to take account of purchases out of tie and guest beer, not to mention Mr Hollard's proved ability to increase barrelage. Mr Flavin's recollection that Mrs Hollard was concerned in the context of declining barrelage appears far more probable (TR4 pp.34-35)
57. Fifthly, and very importantly, the Judge's conclusion was reached without putting or attempting to put known events and undisputed contemporary documents into context. He referred in his judgment to the barrelage print-out, the profit and loss account and rent assessment and the two rent panel presentations as "established" facts. But he did not, in his reasoning, consider what significance could or should attach either to them or to the known facts relating to the concessionary rent and barrelage afforded to the Hollards or to the overall timing of events on the parties' respective cases. The Hollards' account gave no answer at all to a whole raft of questions about the course of events: how could the critical discussion about rent have taken place in March 1991, if it took place after Mr Flavin had discussed rent with his directors - as Mr Hollard himself said that Mr Flavin had told him he had already done by the time of the critical discussions about rent? The first rent panel was only on 2^nd May 1991. And, if rent was discussed in detail in March 1991, why was nothing done to progress matters until two months later in May 1991? And why did not Mr Hollard, on his case and as a very experienced publican whose wife was concerned about undertaking any MPO, trouble to ask about barrelage at any time between March and July 1991? Mr Hollard was described by Mrs Hollard as "really good on barrelage". He was interested enough in barrelage at the December 1990 and March 1991 meetings, but apparently content to enter a lease in July without any recent figures covering any of the last four months before the agreement for lease. The Hollards' case regarding their motivation and knowledge does not fit with a likely pattern of behaviour.
58. Moreover, if in March 1991 Mr Flavin had been asked for and had agreed to put up to his board a concessionary rent, why did he not do so then or at the first rent panel meeting, or until the second rent panel meeting on 21^st May 1991? Why would Mr Flavin have been ready in March 1991 to discuss or put up to his board any concessionary rent at all, if his view was that The Angel was continuing to trade as in late 1990? Mr Hollard's evidence gives no answer. He acknowledged that on a 500 barrel turnover and at £50,000 p.a. rent, The Angel would have been trading profitably - without and before any of the improvements which he was aiming at later introducing (TR1 p.49-50). His wife's evidence on the other hand expressly linked the concessionary rent to the fact that The Angel "had been run down, obviously it needed to pick itself up ...." Mr Fox, an Inntrepreneur director who sat on the two rent panels, while he had no direct recollection, said that "the rent concession must have been given to enable the Hollards to build up trade after a significant fall in trade". It was "possible, but highly unlikely" that it was because the Hollards were the only persons interested at the time. The natural inference is that so substantial a concession reflected present performance below a level at which the public house would be profitable.
59. And why, at the end of June 1991, did or would Inntrepreneur agree a concessionary barrelage for the first three months of only 40 barrels? Further, why did Mr Flavin put up to the first rent panel, not the MPO of 400 barrels which (according to Mr Hollard) he had said he would do and had said "would be no problem"? Why did or would he instead put up 450 barrels, and why was it the panel which lowered that to 400? On the Hollards' case there were and are no satisfactory answers to such questions.
60. As to the documents, it was common ground before us that the second rent panel presentation, seeking the concessionary reduction of rent, related to the Hollards. To what else can the first rent panel presentation and the barrelage print-out and profit and loss account/rent assessment leading to it relate? The (only) explanation proffered before us by Mr Waters on behalf of the Hollards was that there may have been some other alternative, potential lessee. That is speculation without, as it appears to me, any foundation in either evidence or likelihood. I set out below the passages from the cross-examination of Mr Flavin which demonstrate that it was not part of the Hollard's case being put to Mr Flavin below.
61. Further, to what is Mr Flavin's writing on the barrelage print-out referable? The most obvious - and in my view the only really plausible answer - which Mr Flavin by his reconstruction supported is that they refer to discussions with the Hollards. One column clearly shows five years' rental at £50,000, plus £20,000 (the sum actually required and paid for fixtures and fittings). Then in another column appear amounts of £55,000 for three years with lesser overwritten figures for the two years below. The overwritten figures appear to have been in one case 15, then 25 and finally 45, and in the other case illegible figures which culminated in a 45, with 55 and 35 being written alongside it. Curious though it is that the figures should have been written in reverse year order (bottom to top), they clearly relate to rental or proposed rental. They fit well with Mr Hollard's own evidence that he sought a rent reduction for the first two years to amounts which he put both in chief and in cross-examination at £15,000 to £45,000 - although, in cross-examination, once he was asked about the apparent similarity of these figures with those on the barrelage print-out, he spoke of the reduction(s) he had sought as having been to "20,000, and 30,000 and 50,000 or two 50,000". Mr Hollard in chief also mentioned a comment by Mr Flavin that Inntrepreneur "were looking for more than £50,000" - a comment which could have some bearing on the figures of £55,000 which appear in Mr Flavin's notes for the three (later) years when reduced rents were not being discussed.
62. Mr Flavin further pointed out in evidence that columns written by him upside down on the print-out appear to explain how to compare annual figures in January, February or March in any year with those in a previous January, February or March - a subject very likely to have arisen in discussions with a prospective tenant.
63. In summary, it would be a very remarkable coincidence if the barrelage print-out, the first rent panel and the notes dated 15^th May 1991 on the barrelage print-out related to anything other than the negotiations with the Hollards. Mr Flavin accepted that it was possible but said it was unlikely that the notes could relate to discussions between him and his superior (Mr Wheeler) responsible for the second panel presentation. The Judge commented expressly in relation to parts of Mr Flavin's evidence under cross-examination where he was ready to concede that certain things were "possible", that "I did not understand him to be accepting that they were likely to have occurred; merely that he could not in all honesty exclude the possibility of the proposition put to him". Here, the notes do not have the character of notes of any discussion between experts within the company. Further, in so far as they refer to a concessionary rental, they cannot precede the first rent panel; and in so far as they reflect a meeting between the two rent panels (e.g. on 15^th May 1991, the date they bear) there is no sensible explanation why there should have been any such discussion or notes, in the absence of any further contact with the Hollards. In parenthesis, I also note that Mr Wheeler (whose statement was read without challenge) was not asked to attend for any suggestion of any relevant internal discussion to be put to him.
64. Mr Waters for the Hollards relied upon the Judge's reasons for refusing permission to appeal, as explaining the basis on which the Judge concluded that the Hollards entered into the lease in ignorance of the true barrelage position and on the strength of a misrepresentation. The application for permission took place on 11^th November 1999 and was supported by reference to similar themes to those upon which this appeal has been based. The Judge responded as follows:
"I have to say that in my judgment an appeal would have no real prospect of success. This is a case which turns wholly on the facts and on my assessment of the witnesses. I have had the advantage of having the flavour in particular of the Hollards and of Mr Flavin, and whilst I have of course indicated, as indeed is the fact, that the decision on the facts has been finely balanced, it is reached entirely in the event on my assessment of Mr and Mrs Hollard in particular, and of my understanding of their motivation and actions in the light of all the evidence they have given and the manner in which they have given it. There is, with the greatest possible respect, in my judgment nothing which will assist the Court of Appeal to reach different conclusion on the facts from that which I have reached. ....
65. As to the proposition that the reasons I have given do not adequately support the judgment because I have not sought to give an explanation of the circumstances in which the two rent assessment meetings took place and to a limited extent as I see it Mr Flavin took documents off the computer and made certain calculations, I do not conceive it appropriate or necessary for a judge to make findings or indeed resolve uncertainties with regard to every matter which is canvassed before him. Only such matters as will enable him to make the central decisions. Given that frankly Inntrepreneur's live witnesses were unable really to have any recall at all of the circumstances in which documents came into being, in the sense that all their evidence was, "This is what happened; this would have happened", and given the circumstances in which a number of Inntrepreneur's documents, even taken on the most charitable view, make no sense at all, and Inntrepreneur was not able to provide any reasonable explanation as to how they came into being, it is frankly beyond human wit or certainly beyond my limited capabilities to understand how certain things happened at Inntrepreneur at all. Nor was Inntrepreneur able to give me remotely convincing explanations in relation to certain of these matters.
On that basis I took the view that all that was incumbent upon me was to do was to weigh the matters, and, for the reasons which I have already given in my judgment, to reach the conclusions that I did no what turned out in the end to be the one central issue in the case. This I have done. ...."

66. In so far as this demonstrates the way in which the Judge came to form his judgment, it seems to me to assist, rather than harm Inntrepreneur's case on this appeal. The Judge confirms that his conclusions on the critical issue whether there was any meeting in May 1991 were reached simply on his assessment of the oral evidence and of (certain) aspects of probability. He did not weigh in the balance or consider any of the probabilities regarding the barrelage print-out, the profit and loss account and rent assessment, the sequence of the two rent panel presentations and decisions, the reduction in MPO and the concessionary rent and barrelage. He appears simply to have eliminated these documents and matters from consideration, before expressing a conclusion based on two limited aspects of probability.

67. Further, in seeking to justify this approach in the reasons which he gave on 11^th November 1999, the Judge spoke in general terms of "a number of Inntrepreneur's documents [which], even taken on the most charitable view, make no sense at all", and in relation to which "Inntrepreneur was not able to provide any reasonable explanation as to how they came into being". He said that it was "frankly beyond human wit or certainly beyond my limited capabilities to understand how certain things happened at Inntrepreneur at all" and that "Inntrepreneur able to give me remotely convincing explanations in relation to certain of these matters".
68. The Judge did not specify which documents which, even "taken on the most charitable view, made "no sense at all" and were not the subject of any reasonable explanation. Nor did he identify what were the "certain" incomprehensible "things" which happened at Inntrepreneur in respect of which Inntrepreneur was unable to provide any reasonable explanation. His judgment only identified one document - some listing particulars inviting the leasing of The Angel for an "ingoing payment of £75,000 - falling obviously into this potential category. This document was under Inntrepreneur's name, it was produced by Mr Hollard and he explained in evidence that he had received it indirectly at some uncertain time prior to his December 1990 meeting with Mr Flavin. The Judge described Mr Hollard as being "curiously uncertain as to how he had come by it". Mr Flavin and Miss Vickery (by the time of trial Mrs Moreland) were adamant they had not produced these particulars. Mr Roger accepted during trial that a dating in 1988, which he had originally put to Mr Hollard, must be wrong (since the description of the property in the particulars included alterations made by the McGuigans). He then put that the particulars must post-date 14^th February 1991 (when Mr McGuigan gave final notice that he was going) (TR2 p.2 et seq.). Although Mr Waters at one stage sought to treat this as a concession, Mr Hollard himself was adamant in answer to Mr Roger that he had received the particulars prior to the December 1990 meeting. They fell into a sequence, by which the public house originally on offer by the McGuigans for a £250,000 payment, then appeared available (through the particulars) for £75,000 and finally, after he had met Mr Flavin, proved available on lease on payment of only £20,000 for fixtures and fittings. Ultimately what Mr Waters was putting to Mr Flavin was the possibility that the particulars were prepared before February 1991 but after Inntrepreneur knew that it was likely that the McGuigans were going to lose the lease. This would be consistent with a date in November or early December 1990, since Inntrepreneur had decided by 19^th November 1990 to give forfeiture instructions for 1^st December 1990.
69. The Judge found himself "unable to determine, even on the balance of probabilities, how this document came into existence or for what purpose". But, whatever the position regarding this document, it does not seem to me to bear on the issues central to this appeal. Below, the document it was relied on by the Hollards in the context of their other, ultimately unsuccessful claim that Inntrepreneur had misrepresented to them the suitability of The Angel for business lunches and evening entertainment. Matters developed during the trial to the point where it was no longer suggested that the particulars constituted any representation made by Inntrepreneur to the Hollards. All that was said was that Mr Hollard, having seen the document, used it as a background to his discussions with Mr Flavin and obtained from him confirmation of certain matters to which the document had drawn his attention. By the end of the trial any claim of misrepresentation relating to business lunches was no longer being pursued, and the Judge rejected the Hollard's case that there had been any misrepresentation regarding evening entertainment. He found Mrs Hollard's evidence on this aspect "unconvincing".

70. The Judge's reference in the plural to incomprehensible and inexplicable documents and things is therefore difficult to follow. Mr Waters submitted before us that he must have been referring to the barrelage print-out, the profit and loss account with rent assessment and at least the first rent panel assessment. The Judge does not refer to them in such terms in his judgment. The suggestion that these documents could relate to some other potential tenant than the Hollards was nonetheless prominent in Mr Waters' submissions on appeal. But below the evidence of Miss Vickery, Mr Flavin and Mr Wheeler was that the Hollards were the only prospective tenants. And the Hollards did not challenge this, but sought to turn it to their advantage. It was thus common ground. So it was never even suggested to Mr Flavin during his cross-examination that any of these documents did or could relate to anyone other than the Hollards. Mr Waters cross-examined Mr Flavin as follows:

"By March, would it be fair to say that you had made the decision not to produce listing particulars?
Yes, I would say that.
You must have been fairly confident, therefore, that Mr Hollard would take the lease?
I hoped he would.
You must have been confident?
Not necessarily because we still had quite a lot of discussions to hold.
Then why did you not go through the simple task of preparing particulars?"
(TR4 p.34)
"You are the one that is selling it to them, are you not?
Yes, absolutely.
And so in order to sell it them this lease you produce a profit and loss account?
My profit and loss.
Yes.
My view of what I believe the average maintainable trade to be."
(TR 4 p.37)
"And can I ask: why did it take you, if you had this meeting in March, until 23^rd April to get the printout?
Because I was going to the panel the following week, so I would have done my preparation for the panel meeting, which was 2^nd May and [sic] on 23^rd.
Why could you not have done it earlier?
Oh, I could have. ....
... should you not have been going a bit quicker?
Well, there are a lot of pubs in our stake.
Yes.
This wasn't the only pub with a temporary tenant.
I appreciate it is not the only pub, but here was a potential tenant who you were confident, or reasonably confident, might take up. why did you not hurry up?
I think I was hurrying up; there are other things for me to do as well."
(TR4 p.45)
"As I understand, equally, it was your view that up until 23 April you had not really done anything on the Angel apart from speak to the Hollards [at a] meeting in March.
I would have visited [The Angel] some time ....
....
What could you have done because, as I understand it, your only potential tenant was the Hollards.
Yes.
You say that prior to 23 April you had not worked out the proposed rent.
Yes, that is the record of my proposal to the panel.
So you would not, as it were, [have] gone into the computer and worked it out prior to 23 April.
I could have, but the point I am making is that I could have done some work on it prior to the 23^rd. The system was a system that you could use at any time.
But you have only used it for the purpose of the Hollards?
I only used it for the purposes of my view of the AMT (average maintainable trade) and my dealings with Mr and Mrs Hollard because that is who I thought I might be letting the pub to.
Could you have done this at the March meeting? .... Done some computer work for the March meeting?
I could have, yes."
(TR5 pp.3-4)
"It is right, is it not, that this public house, whilst it was on a temporary tenant, was not maximising the imut for the income for Inntrepreneur and the brewery?
Yes, that is true.
It is right, is it not, that Mr Hollard, the Hollards, at this stage were your only fish in the sea?
They were the only people who wanted the pub.
They were the only people who had any interest at all in the pub?
Well, they were the only people that we had actually invited as tenants because we did not put the particulars out because we felt we had the right people.
And if they did not take the Angel, you would have been back to square one, would you not?
We would then have marketed the pub."
(TR5 p.18)
71. I have quoted these passages at some length because of their fundamental inconsistency with the general doubt which Mr Waters sought to suggest about the relevance to the Hollards of the barrelage print-out and profit and loss account of 23^rd April 1991 and of the first panel meeting. When Mr Roger pointed out in the context of his application for permission to appeal on 11^th November 1999 that the Judge had not addressed these documents, Mr Waters suggested similar general doubts about Inntrepreneur's documentation. This in turn appears to have led to the Judge's response, in equally general terms.
72. Since neither Mr Waters nor the Judge explained what documents were said to be incomprehensible or why, all that can be said is that the Judge's remarks when refusing permission to appeal may very well embrace the critical barrelage print-out, profit and loss account, and panel review documents. If they were not so intended, then there is no other indication why he ignored these documents. If they were so intended, however, then, in my judgment, the Judge fell into significant error. First, as I have pointed out, it was not part of any case put to Mr Flavin at trial that the documents did not relate to the Hollards. Secondly, the Judge's reasoning assumes what it sets out to prove. It is simply not correct that Inntrepreneur "was not able to provide any reasonable explanation as to how they came into being" or to give "any remotely convincing explanations" in relation to them or place and significance in a coherent course of events. The Judge's statement itself only makes sense if, begging the whole issue, one has already rejected Inntrepreneur's case regarding a meeting on or about 15^th May 1991 to discuss rent. On the Hollards' case, of course the documents cannot be explained. But that is a reason, for considering very carefully whether the Hollards' case can be correct, not for rejecting Inntrepreneur's case. The Judge's reasoning, so far as it was directed to the central documents at all, was circular. Thirdly, as I have observed, there is nowhere in his judgment or in his reasons of 11^th November 1999 the essential weighing against each other of all the evidence and probabilities regarding both events and documents. That exercise was an essential part of the process of deciding whether or not barrelage and rent were or were likely to have been discussed in May 1991, and whether or not the lease with its dual concessions as to rent and barrelage was or was likely to have been entered into in knowledge or ignorance that barrelage was in further decline.
73. Another document to which our attention was drawn on this appeal was a letter dated 8^th February 1991 expressing great interest by a Mr J.R. Liddell in taking over the premises. This letter came not from Inntrepreneur's files, but from a management file of GME, their owning company, which was located in a separate building and communicated with Inntrepreneur only in writing. Mr Flavin explained that he had known nothing of either the letter or the Liddells. There was no challenge to this evidence. On the contrary, it was implicitly accepted by questions put to Mr Flavin based on the proposition that the Hollards were, so far as he was concerned, the only prospective tenants (see the passages quoted above). On the face of it, it cannot for whatever reasons have been thought appropriate to pass on the Liddell's interest to Inntrepreneur. The relevance of any residual doubt about what happened to the Liddells' enquiry escapes me.
74. On this appeal Mr Waters also suggested that there was room for general doubt about Inntrepreneur's documentation and disclosure. He referred to the fact that Mr Flavin had not disclosed any notes of any March 1991 meeting, nor any copy of a business plan which it was common ground that Mr Hollard had prepared. Nor indeed did Mr Hollard disclose any such document. And Mr Flavin did not say that he would necessarily have made any such notes. Indeed, the Judge expressly found, as a matter of probability, that no such notes were made. As to the business plan, although Mr Flavin believed that Mr Hollard had let him have a copy of his business plan, Mr Hollard said that he had simply read it and not showed it to Mr Flavin. The general doubts which Mr Waters sought to suggest about Inntrepreneur's documentation have no basis in either the judgment or the evidence. There was and is no basis for saying that documents were missing from Inntrepreneur's files.
75. Mr Waters submitted on behalf of the Hollards that there could not have been any meeting in May 1991 or any disclosure of the true trend of barrelage figures after the December 1991 meeting, because the Hollards could not have forgotten if they had known the true position. That argument overlooks the fact that the Judge did not accept their general reliability as historians or their evidence or recollection on a number of specific points. I find particularly unconvincing in this case the argument that the Hollards' evidence must be right on these points because otherwise they must have been lying to the Judge about it. This argument, frequently deployed, overlooks the power of the human self-persuasion or self-delusion. Professor Karl Jaspers once used to tell his students: "My memory tells me that I did it. My pride tells me I did not. And my pride will win." The same applies when one is concerned with the stresses and incentives arising from the combination of financial hardship and litigation.
76. Mr Hollard, an experienced publican, admitted in evidence that he "would have appreciated very quickly precisely what the position [regarding the barrelage being sold at The Angel] was" after he took possession. The admission was somewhat grudging, since his first answer was that he "would have appreciated it up to a point". But in fact it only repeated what was said in his witness statement:
77. "I also soon found out that the turnover was nothing like that which Mike Flavin had told me it was. It certainly was not trading at over 500 barrels when I took in on, or anything approaching 500 barrels."
78. The temporary manager also showed Mr Hollard his figures for his last week of trading which were similar to those of the Hollards. Yet the Hollards made no claim nor any recorded complaint for well over a year. In submissions attempts were made to explain this by reference to other problems, such as noise problems which precluded evening discos and Karaoke. But these appear to have been hoped for improvements to the public house's trading, and could not anyway explain - and Mr Hollard did not suggest in his witness statement or evidence that they could explain - the basic inconsistency in barrelage which (on his case that he had been told that the barrelage was around 480 barrels) was staring him in the face from the outset.
79. When asked on this topic in oral evidence, Mr Hollard suggested that he had made a telephone complaint to Mr Flavin about the information on barrelage which he had given, and that Mr Flavin had come down for a further meeting. No such complaint had been mentioned in his witness statement, or was elsewhere recorded, although Mr Flavin's witness statement referred to a telephone call in which the Hollards said that they were in financial difficulty and that trade had not picked up as anticipated. The letter of 29^th October 1992 by which the Hollards did eventually complain, makes no mention of any prior complaint about any barrelage misrepresentation. If there was any at all (as to which the Judge made no finding) it can hardly have been a serious complaint.
80. The Hollards made no recorded complaint relating to any barrelage representation until 29^th October 1992. By then, they were in arrears of rent and Inntrepreneur were refusing a further rent concession, though offering to pay £25,000 towards and on completion of proposed works to reduce noise. Through his solicitor, his brother-in-law, Mr Hollard wrote in these cicumstances complaining as follows:
"We are instructed that when our Clients originally negotiated to take a Lease of the above premises from the Brewery the Brewery indicated a barrelage of 400 barrels per annum was quite normal and indeed talked in terms of 600 to 700 barrels per annum. Mr and Mrs Hollard had to rely on the Brewery for this information as the original Tenant had left and the Brewery had a temporary Manager in the premises who, we are instructed, left on the afternoon of the Protection Order being granted.
.... From the time our Clients took over the running of the Public House they have only been able to achieve a barrelage of approximately 270 barrels per annum due to its restricted serving area and in the circumstances there is no way the Public House can pay a rent of £50,000 per annum on this barrelage."

Then, after a complaint that the premises could not have disco or Karaoke evenings, because of the noise problem, the letter went on:

"It is essential therefore that the various structural works be carried out to enhance the building, to make it more soundproof and to encourage more persons to frequent the premises in order to attain the barrelage of 400 barrels per annum which the Brewery informed Mr and Mrs Hollard the premises were quite capable of sustaining. As mentioned above this information regarding barrelage is quite incorrect."
81. These complaints were flatly inconsistent with the case which the Hollards put forward by counterclaim when sued two years later. The likelihood, or otherwise, of Mr Hollard's attempted explanation in cross-examination for the inconsistency (viz. that the letter represented muddle by his solicitor brother-in-law who was unfamiliar with the trade) is another matter which the Judge did not mention. It should have been weighed with other factors when balancing the overall probabilities.
82. It may also be noted that the Hollards' case as originally pleaded in September 1994 was that, while the representation in December 1990 was of a current barrelage of 480, that in March 1991 was of a barrelage of about 500. Only in Particulars served in November 1998 did the Hollards plead the case which the Judge found proved, namely that the representation was that "the Public House is still doing about the same barrelage as at our previous meeting according to brewery figures". Mr Hollard's witness statement of January 1999 supported the original case, while in oral evidence he and his wife gave evidence along the lines of the Particulars. He said that Mr Flavin had in March 1991 also mentioned figures of "around 480/500".
83. The Court of Appeal must always pay respect to the conclusion of any judge as to the credibility of a witness who has given evidence before him. A classic statement of Lord Thankerton in Watts v. Thomas [1947] AC 484, 487-8 put the matter as follows:
"I do not find it necessary to review the many decisions of this House, for it seems to me that the principle embodied therein is a simple one, and may be stated thus: I. Where a question of fact has been tried by a judge without a jury, and there is no question of misdirection of himself by the judge, an appellate court which is disposed to come to a different conclusion on the printed evidence should not do so unless it is satisfied that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge's conclusion. II. The appellate court may take the view that, without having seen or heard the witnesses, it is not in a position to come to any satisfactory conclusion on the printed evidence. III. The appellate court, either because the reasons given by the trial judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court
84. After quoting this passage in Armagas v. Mundogas ("The Ocean Frost") [1985] 1 Ll.R. 1, 56, Goff LJ (as he was) said:
"However, Lord Thankerton added this rider:
"It is obvious that the value and importance of having seen and heard the witnesses will vary according to the class of case, and, it may be, the individual case in question.
Furthermore it is implicit in the statement of Lord MacMillan in Powell v. Streatham Manor Nursing Home at p. 256 that the probabilities and possibilities of the case may be such as to impel an appellate Court to depart from the opinion of the trial Judge formed upon his assessment of witnesses whom he has seen and heard in the witness box. Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth. I have been driven to the conclusion that the Judge did not pay sufficient regard to these matters in making his findings of fact in the present case."

85. In cases like the present where the Judge concludes that both sides are honest, the need to test accuracy by reference to "the objective facts proved independently of their testimony" and by reference to "the overall probabilities" is not less pressing. This point is also made in this Court's unreported judgment in Heffer v. Tiffin Green (17^th December 1998, Nourse, Henry and Robert Walker LJJ).
86. Further, to describe the Judge's conclusions as turning on his view of witnesses' credibility, appears to me to misdescribe the process of his reasoning as expressed both in his judgment and in his reasons for refusing permission to appeal. First, he gave only the two reasons identified earlier in this judgment. One was a reason of inherent probability, which can by itself carry little weight, in the light of the Judge's general conclusions about the Hollard's limited reliability and the lapse of time. The other depends on a view of probability arrived at without mention of evidence given by Mr Hollard, which, on its face, makes it likely that Mr Hollard would have been willing to sign an agreement imposing an MPO of 400 barrels. Secondly and more fundamentally, the Judge failed to conduct an appropriate exercise of weighing all the evidence and probabilities. The limited approach which he deliberately set himself led him to ignore central documents, the relevance of which to the negotiations with the Hollards, was not challenged with their maker, Mr Flavin.
87. In my judgment, if one stands back and looks at all the evidence and probabilities in the light of the Judge's assessment of the witnesses as a whole, the very strong overall probability is:
that rental was rediscussed in detail with the Hollards on or about 15^th May 1991, in the light of detailed and deteriorating barrelage figures up to February 1991;
that it was then and in that light that the Hollards indicated that they wanted a substantial concessionary rental;
that this was granted at the second panel meeting on 21^st May 1991; and
that the final barrelage concession likewise reflects awareness of the deterioration (indeed in likelihood of the further deterioration by the lease agreement date) in the public house's barrelage.
By deciding not to try to form even a probable view of the course of events, by deciding not to try and test the accuracy and likelihood of each side's case by reference to the explanation or lack of explanation which it offered for known facts and "established" documents and by failing to identify and take into account a substantial number of relevant considerations militating against the conclusion which he adopted, the Judge engaged in an exercise of judgment which was essentially flawed. Directing myself by reference to Lord Thankerton's words, I am quite satisfied that any advantage enjoyed by the Judge in seeing the witnesses could not be sufficient to explain or justify his conclusion. His reasoning is unsatisfactory in a number of respects, and his conclusion derived from his failure to take into consideration and weigh as a matter of probability established and relevant documents and events.
88. The upshot is that I for my part am quite satisfied that the Judge's finding in favour of the Hollards on the single issue on which they succeeded cannot be sustained. The judgment must be set aside. That leads to the question whether this Court should enter judgment in favour of Inntrepreneur or should order a retrial. In my judgment, had the Judge approached the exercise which he had to undertake correctly and taken into account all the relevant evidence and all the matters bearing on the overall probabilities, there was only one conclusion to which he could have come. That is that the Hollards were aware of the barrelage decline in the first half of 1991, that this was disclosed on or about 15^th May 1991 (and, although this is unnecessary for my conclusion, probably further identified in June 1991) and that the rental concession (and later barrelage concession) related to such awareness.
89. As I have said, that in no way concludes or suggests that the Hollards were lying at trial. Nor do I consider that there is any possibility that the Judge would have avoided this obvious conclusion by holding that, even if there was a meeting in May 1991, Mr Flavin must then have deliberately misled the Hollards about, rather than have disclosed the barrelage figures. That suggestion, so far as it was made by counsel at all on this appeal, would appear to me to have no foundation in any evidence or any likelihood at all. It runs fundamentally contrary to the Judge's assessment of Mr Flavin as an entirely honest and open man. It treats him as someone who would have become involved not in muddle, but in the commission of the most blatant fraud - one which he would have to expect would rapidly come to light when Mr Hollard entered into possession. Above all, it offers no plausible explanation at all for the two rent panel hearings, the concession made in respect of rent following the meeting, and the notes on the barrelage print-out, not to mention the later barrelage concession.
90. For these reasons, I would conclude without hesitation that the Judge's judgment should be set aside and that judgment should be entered for Inntrepreneur on the claim and counterclaim.

Lord Justice Roch:
91. I agree with Lord Justice Tuckey that this appeal should be dismissed for the reasons he gives. Because one member of the court holds a contrary view and in deference to the skill with which Mr Rodger presented this appeal I shall state my conclusion briefly.
92. The Judge made three crucial findings of fact. They were:
(1) That at a meeting in March 1991, Mr Flavin said that the public house was still trading at the level he had indicated to Mr Hollard at the meeting in December 1990.
(2) That Mr Hollard relied on that statement in that he would not have entered into the tenancy agreement had he known that that statement was not true. I observe that it was common ground that if that statement was made then it was not true.
(3) That Mr and Mrs Hollard were not shown the barrelage summary, dated 23 April 1991.
93. Those three findings were based on evidence given by Mr and Mrs Hollard which the Judge accepted. The issue in this appeal is whether this is one of those rare cases where this court should overturn a trial Judge's findings of primary fact based on acceptance of oral testimony of witnesses the Judge has seen and heard, because of "the printed evidence". This is not a case of this court drawing an inference different from the inference drawn by the Judge. In my judgment, the "printed evidence" available to this court in this appeal does not make it unmistakably appear that the Judge was wrong to accept those parts of the evidence of Mr and Mrs Hollard. Despite the skilful argument of Mr Rodger, I cannot consider that it would be satisfactory on the "printed evidence" available to come to the conclusion that the Judge was wrong in making the three crucial findings which formed the basis of his judgment in favour of the Respondents.

Order: Appeal dismissed; costs order that respondent should have the costs of the appeal; detailed assessment of respondent's costs under the community legal aid scheme; payment on account in the sum of £40,000.
(Order does not form part of approved judgment.)