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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 >> Dickinson (t/a John Dickinson Equipment Finance) v Rushmer (t/a F J Associates) [2000] EWCA Civ 42 (14 February 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/42.html Cite as: [2000] EWCA Civ 42

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Case No: PTA/1999/6591/B2
and CCRTF/1998/1541

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
His Honour Judge Hallgarten Q.C.
Royal Courts of Justice
Strand, London, WC2A 2LL
Monday, 14 February 2000

15. The judge then gave six reasons to some of which I will turn in due course. It seems to me - and I do not understand Mr Salter to argue to the contrary - that the fact that the judge found the determination nicely balanced and thus difficult does not substantially impact upon the fate of this appeal. It could be said that, by these comments, the judge showed, albeit of course in very general terms, an awareness of the potency of some of the appellant's points. To that limited extent, Mr Salter's path may be the steeper. In general, however, the difficulty of the decision, as the judge saw it, seems to me to be a neutral factor in this court.

16. Not surprisingly Mr Salter makes much of the fact that, in certain areas, the respondent was found to be an unsatisfactory witness; and, of course, he couples this part of his submission with a reference to the burden of proof which lay squarely upon the respondent. When I observe that, to my mind, one of the biggest challenges set for a judge is to pick out the situation where an unreliable witness nevertheless establishes a good case, I do not mean in any way to dismiss the seriousness - or downgrade the relevance - of forensic dishonesty.
17. Mr Salter's best example is the respondent's bogus defence to the counterclaim for £6,400. By virtue of the final joint transaction the respondent had obtained a fee of £12,800. That transaction was proceeding at just the time when the parties fell out and when the respondent was at last beginning to complain that the appellant had not properly accounted to him in respect of previous transactions. The appellant in effect refused to divulge further details of the previous transactions and countered with a claim for one half of the sum of £12,800. It seems clear that, just as the appellant was not minded to concede his claims, the respondent himself was in no way minded to concede the claim for £6,400, whatever its validity. So he concocted a story that the finance-house involved in the transaction had insisted that the appellant should play no part in its negotiation and that accordingly no part of the fee obtained by him from the finance-house should be payable to the appellant. At trial the appellant called an officer of that finance-house, whose evidence showed that the respondent's assertions about the stance taken by his company had been untrue. But, even had they been true, such a stance would not have precluded a private accounting between the parties of whatever was due in respect of a transaction negotiated by the respondent on the introduction of the appellant. Mr Epstein, on behalf of the respondent, makes, with respect to him, a thin attempt to argue that the judge's findings on the amended counterclaim represent a conclusion that the respondent's evidence was in error but not necessarily deliberately so. And, in reply, Mr Salter jumps on the band-wagon and complains that the judge failed to appreciate that the respondent's untruths in relation to the counterclaim were deliberate. What the judge said was that the respondent's account was "not credible". Speaking for myself, I see no room for honest mistake in relation to the respondent's evidence in this respect; and nothing in the judgment gives me the impression that the judge took any more benign a view of it.
18. A somewhat better point made by Mr Epstein is that the judge also to some extent rejected the appellant's evidence referable to the counterclaim for £6,400 inasmuch as he found that it was owing by virtue of the original agreement to share equally made in 1992 and not, as the appellant had contended, by virtue of a bespoke agreement reached much later in respect of that particular transaction.
19. Mr Salter also relies heavily upon the fact that it was the respondent's case, articulated by Mr Epstein in his opening before the judge in unqualified terms, that, although the possibility of transactions of type B or C as well as A had been canvassed at the meeting in January 1992, he always understood that, for the 22 transactions negotiated by the appellant upon his introduction, the appellant had adopted type A. It was clear from the respondent's own evidence that he kept the appellant in the dark about the details of many of these transactions. But two documents contemporaneous with two of the transactions, together, in relation to a third transaction, with comments made in the respondent's own witness statement, indicate quite clearly that, in relation to those three transactions, he was or should have been aware that they were of type B.
20. Another point adverse to the respondent's credibility is that, in an application form for the grant of a tenancy of a new home, he had falsely represented that he was an employee of the appellant and, even more demonstrably untrue , had been such for upwards of five years. Mr Salter also picks from the respondent's witness statement two other assertions which, when explored at the hearing, turned out to be untrue; but, to my mind, they are of much less significance.
21. At all events, these points, taken compendiously, embolden Mr Salter to submit to us that only one of the parties, namely the respondent, was shown to have lied in connection with the claim (and otherwise) and that the judge was inappropriately even-handed in his criticism of the credibility of each party before making his crucial determination.

22. It is here that, in my view, Mr Salter has become too bold. The judge did indeed make considerable criticism of the appellant's veracity and described his evidence as unsatisfactory to a degree equal in many ways to the evidence of the respondent. In the course of the hearing of this appeal we have been asked to survey in detail the basis for these remarks. The judge made considerable criticism of the quality of the appellant's discovery at the date of the hearing in June 1998. In order to reconstruct what the agreement in 1992 had been and to determine the consequences of any breach, it was necessary for him to focus upon the subsequent transactions, upon what proceeds each had generated in one way or another and upon what had been paid by the one party to the other referable thereto. To that end, the judge needed to be provided by the appellant with such documentation relating to the first 22 transactions as would reveal the level of fees obtained from the customer and/or finance-house and, in particular, in respect of the many transactions of type B, would reveal the uplift. Indeed the court had ordered discovery to be given; and there had been no suggestion, whether in the order or otherwise, that the appellant should be spared the duty to disclose any category of documents until after the first stage of the hearing. But the necessary documentation was largely absent. The appellant said that the documents had been lost in the course of a move of his offices. But the judge expressed himself not satisfied that the appellant had given as much discovery as he was capable of giving; in other words, not satisfied that the appellant had fully revealed the documents which would have identified the figures integral to the claim.

23. Furthermore, thrown back by the absence of documents upon the need to estimate uplift, the appellant, as the judge found, considerably understated its size. Indeed the understatement, as found by the judge, was not just to himself in evidence, but to the respondent during the period of the parties' collaboration. In the judge's words:
"The [appellant's] case that he told the [respondent] of the amount of any fee when one arose, but gave no other details, strikes me as implausible. On balance, I consider it much more likely that in each case the [appellant] presented the [respondent] with some figure said to represent overall commission and withheld information as to the true profit which the deal had generated."

24. The judge's point can be clearly illustrated by reference to the twelfth transaction named "Patrick Denny". Here the appellant negotiated a type B transaction which led to an uplift of £950 but in relation to which neither the customer nor the finance-house paid him a fee. Following a conversation with the appellant, the respondent had invoiced him for £350 and been paid that sum. The respondent's explanation was straightforward, namely that the appellant had represented to him that the commission had been £700; hence his claim, which by payment the appellant had accepted, for half. If, however, as the appellant contended, he never revealed uplift to the respondent because that was outside the parameter of their agreement and only revealed fees, what, as Mr Epstein asked him in cross examination, had he represented to the respondent which had resulted in the claim for £350? The appellant was unable to answer Mr Epstein's question. What, on the appellant's case, could he have said? All that Mr Salter could suggest to us was that his client might simply have said to the respondent: "I will pay you £350".

25. There was another, discrete area of the appellant's evidence which was rejected by the judge. It related to an arrangement which he had reached with a third broker, Mr Savage, in relation to the latter's contribution to the 22^nd transaction, named "M2 Video Facilities". After the transaction, which was of type B, had been duly brokered, Mr Savage and the appellant entered into a dispute as to what Mr Savage's share of the profits had been agreed between them to be. Indeed Mr Savage had sued the appellant in separate proceedings which were ultimately compromised. The issue in those separate proceedings, also raised in evidence given by both Mr Savage and the appellant in the present proceedings, was whether the appellant's contractual duty was, as he contended, to account to Mr Savage only for one half of any fee generated by the transaction or, as Mr Savage contended, to account to him for one half not only of any fee but also of any uplift generated in the course of the transaction. The judge disbelieved the appellant's version of that transaction.

26. My conclusion is that the judge was amply entitled to conclude that the appellant's evidence was in many ways as unsatisfactory as the evidence of the respondent and that, although their lack of credibility was exposed in different respects, the obstructive dishonesty which the appellant was found to have brought to a major part of the forensic exercise - which was to seek to understand what the parties had agreed by reference in part to how they had subsequently dealt with each other - was of especial seriousness.
27. By his next point Mr Salter contends that the respondent's case as to the terms of the agreement was too uncertain for the law to entertain or, at least, to entertain other than sceptically. He says that the respondent was clearly asking for one half but never consistently identified the nature of the fund which was to fall for division in that way. It is true that by his statement of claim, by the further and better particulars of it which were subsequently delivered, by his witness statement and again in his oral evidence, the respondent described that part of his case in slightly different ways. But, to my mind, his case was clear from the outset: he was contending that the agreement entitled him to one half of everything that had come into the appellant's hands by reason of a joint transaction; his slightly different terminology represented only different attempts to specify what, in the circumstances, "everything" meant. The judge's own formulation of the respondent's claim, set out at the beginning of his judgment, was that the parties would share 50/50 "all commissions, fees, profits or other benefits from any source..." generated by any joint transaction. Mr Salter contends that that was an erroneous summary of the respondent's case but I cannot accept the contention. In my view it was entirely accurate and, perhaps not surprisingly, represented a rather better formulation of what the respondent had been seeking to convey than his own attempts at specificity.
28. Mr Salter proceeds to submit that an equal division of in effect everything generated by a brokerage transaction was, and should by two experienced brokers have been realised to be, unworkable, given the differences in the type of transaction into which the appellant might, and indeed did, enter. The judge's judgment upon taking the account in 1999 does not suggest that he found substantial difficulty in applying to the individual transactions the agreement which he had found to have been made. But, as the judge in effect pointed out in his judgment in 1998, the fact, if it be the case, that the application of a simple agreement to a set of facts becomes difficult, need not mean that there was no simple agreement in the first place. He observed, in my view reasonably, that, if a deal was cropping up in relation to which an equal division of all proceeds would be likely to prove unworkably complex, the appellant could have raised the problem with the respondent and sought revision of the terms. Yet the appellant never did so. I do not follow Mr Salter's argument that it would have been open to his client to seek to re-negotiate the terms in relation to a proposed transaction only at a point after he was bound to account for it to the respondent by reference to the original terms.
29. The first of the six reasons articulated by the judge for considering that the respondent's case was more plausible than that of the appellant was that there was a great deal of commercial sense in an equal split being at any rate an appropriate starting point. Mr Salter attacks this conclusion. He concedes that there would be a great deal of commercial sense in such an arrangement for the introducer of the customer, i.e. mainly the respondent, but submits that there would be far less commercial sense in it for the negotiator, i.e. mainly his client. Mr Salter says that, in relation to the first 22 transactions, it was his client who did the work; who decided upon the shape of the transaction; who put it all together; and who, in all but transactions of type A, took the risks. He also relies upon the judge's finding that in the negotiations the appellant was in the stronger bargaining position. The evidence showed that the appellant had a much larger independent brokerage business than did the respondent; and Mr Salter suggests that, in the negotiations at the restaurant, it would be the interest of the appellant, a man with a keen eye for profit, which would have prevailed.
30. The risks taken by the appellant, particularly in type B being the predominant type of transaction entered into, were carefully considered by the judge. In that type of transaction the appellant bought the equipment from the supplier and sold it on to the finance-house. The appellant said that there was considerable risk inherent in that sequence. But the judge found that the two transactions were generally back to back; and the evidence showed that the appellant seldom paid for the equipment until he had been paid for it. Mention was also made of the appellant's liability to the finance house for any fault in the equipment sold to it. But the judge considered that, being in a contractual chain, the appellant could reasonably anticipate being able to pass any liability back down.
31. In the last analysis there is the most obvious of points to be made in favour of an equal split, namely that the appellant would never have had any benefit from the transactions in the absence of the respondent's introduction of no less than 20 different customers for the 22 transactions. And in my view there were three other pieces of evidence which supported the judge's conclusion about the commercial sense of an equal division.
32. The first was that, shortly before the parties had entered into their agreement, Mr Palmer, an officer of another broking company in the field, had proposed to both of them a tripartite combination under which the introducer of the customer would receive 40% of the profits of the transaction, the procurer of the finance a further 40% thereof and the processor of the transaction the remaining 20%. The respondent pointed to that proposal, which in the event the parties had declined to accept, as showing that it had been Mr Palmer's approach at any rate to place the reward for the introducer of the customer and the procurer of finance on a par. The appellant's response, which has some force, was that, in the first 22 deals under consideration, he was both the procurer of finance and the processor of the transaction and so, to the extent that Mr Palmer's suggested allocations were of any significance, he would have received 60% of the proceeds.
33. Second, and more important, the judge found, as I have explained, that the appellant's own deal with Mr Savage was for an equal split of all the proceeds of the 22^nd transaction.
34. Finally, of course, there were the final five transactions in which the roles of the parties were reversed. In the first four of them the respondent had duly accounted to the appellant for one half of the overall proceeds and indeed in one of them had punctiliously paid him rather more than he, the appellant, was expecting in order strictly to account to him for one half. In respect of the fifth, the subject of the amended counterclaim, the respondent was adjudged liable to do likewise. If that was the arrangement reached - whether in 1992 or later - in relation to those five transactions, it is hard to see why commercial sense should have required otherwise when the roles had been reversed.
35. In my view it is the appellant's version of the agreement which, on an objective basis, more arguably lacks commercial sense. Of course, on his version, there was no real agreement at all in that the task of reaching agreement was stood over until after a particular transaction had been completed; and, even then, according to the appellant, the negotiation would have been only in relation to a fair division of fees generated by the transaction and not of any uplift. It is clear that the appellant gave himself a free hand as to how to structure transactions which been the subject of introduction by the respondent. So in a number of cases it seems to have been open to the appellant, for example, to choose type B rather than type A. A transaction of type A would have generated greater fees, namely an arrangement fee and/or an introduction fee. A transaction of type B, did not generate an introduction fee, at any rate where there was an uplift, although it did often still generate an arrangement fee. So, instead of an introduction fee from the finance house, there was the uplift. Thus, as it seems to me, the appellant's version of the agreement placed - and might reasonably have been anticipated to place - the respondent in the commercially nonsensical situation of being vulnerable to a choice by the appellant of a structure for the transaction which would yield him little or sometimes even nothing. I have already referred to the fact that the twelfth transaction was one in which no fee was paid by anybody. If the agreement was as the appellant contended, the position of the respondent, as introducer of the customer, was as secure as water in a sieve.
36. There is another point about the appellant's case which did not figure in the judge's six-fold summary but which, speaking for myself, has caused me difficulty. I have already touched on it but only in relation to one transaction, namely the twelfth. It was common ground that relatively small, specific sums had been invoiced by the respondent to the appellant in respect of the first 22 transactions and duly paid by him. For example, for the first transaction the appellant paid the respondent £1,010; for the second, £743.70; and so forth. The question is: how did the parties calculate the sums which both at the time accepted were payable? The respondent's answer in evidence was clear. It was that the appellant would inform him of the amount of the profit generated by the transaction; that, until towards the end of their relationship, he accepted the figures without question; that he duly invoiced the appellant for one half of the figure which the latter had quoted; and that he received payment accordingly. Thus, to take the second transaction, he contended that the appellant had represented the commission to have been £1,487.40. But what was the appellant's case as to how these sums were arrived at? Speaking for myself, I find no explanation on his part. His case is that, by virtue of the original agreement, there was supposed to be a negotiation following the conclusion of the particular transaction. It is clear that seldom if ever was there any negotiation in the accepted sense. But the appellant must have said something to the respondent which prompted all the invoices which the appellant found acceptable. And I feel forced, upon the evidence presented to the judge, to the conclusion that the respondent's version is correct in that the appellant gave him a figure which each expected to be split and which was duly split. Why? Because the initial agreement had been for an equal split. The fact that, as the judge found, the figures given by the appellant to the respondent did not in many cases disclose the true level of his profit does not detract from the force of this part of the evidence in support of the respondent's case.
37. I have referred to the letters which ultimately passed between the parties when they began the dispute. The sequence begins with a letter by the respondent to the appellant dated 2^nd November 1995 as follows:
"As you will recall, our relationship was originally based upon a simple premise. All jointly proposed transactions would be subject to an equal sharing of all proceeds, whether from the payment of fees or commissions, or the "added-value" element on suppliers' invoices. I am sure that you would agree."
38. The appellant's response, by his letter dated 6^th November 1995, was:
"I do not accept your allegation that you have not been remunerated as per our various verbal agreements."

39. Mr Salter was constrained to concede that the respondent's letter was a better presentation of his ultimate case than was his client's letter in answer. I think that it is strongly arguable that the appellant's reference to the respondent's remuneration `as per our various verbal agreements' was a reference to the conversations to which I have referred in which he represented - or mis-represented - the level of profit generated, on the basis of which the parties implemented the agreement for equal division.

40. I would like to pay sincere tribute to the forensic charm as well as efficiency that Mr Salter has brought to the hearing before us; but not even he has been able to satisfy me, at the conclusion of the painstaking study of the evidence which we have conducted, that the judge was wrong in his central determination as to the terms of the agreement reached between the parties. I would dismiss the first appeal.
41. I turn to the second appeal which requires more detailed consideration to be given to the transaction which is the subject of it, i.e. the tenth transaction named "Mag Masters (2)". The judge found that, contrary to the appellant's contention, this had not been a transaction of type C because it had not involved a lease. What had occurred was that the appellant had made an unsecured loan to the customer at in effect an interest rate approaching 30% per annum. The customer had defaulted on the loan and, although the judge made no specific finding to this effect, the appellant had lost about £30,000. Meanwhile, presumably towards the outset of the transaction, the appellant had paid £1,450 to the respondent by way of his entitlement to a share in fees. The judge recorded that the respondent contended that he had understood the transaction to be an orthodox one of type A. The judge did not expressly accept or reject the respondent's contention as to his state of belief; but on balance I infer that he accepted it. Certainly the appellant never claims to have explained to the respondent the nature of the transaction, or that it fell outside all three types of transaction considered at the meeting in January 1992 or that, without security, it was of an extremely risky character.

42. In a schedule served by the appellant upon the respondent through solicitors about a month before the hearing on 1^st March 1999, the appellant made clear that he proposed to argue, at the taking of the account at that hearing, that the sum of £1450 paid by him to the respondent should be paid back or credited to him by reason of the absence of profit derived from the transaction and that £15,000, being half his loss on the transaction, should also be paid or credited to him.
43. At the outset of the hearing on 1^st March the appellant duly sought to raise these arguments. His first contention was that there was no need for him to re-amend his counterclaim in order to raise them. The argument was based on rule 6 of order 43 of the Rules of the Supreme Court 1965, which was then in force and which then applied to proceedings in the county court; soon afterwards the matter came to be governed by paragraph 4 of the Practice Direction, No. 1, PD, 40A, of the Civil Procedure Rules 1998, the wording of which is very similar. The rule provided:

"In taking any account directed by any judgment or order all just allowances shall be made without any direction to that effect. "
44. The appellant argued that his claims totalling £16,450 represented `just allowances' which the court was obliged to make in his favour in any event. How, as a matter of justice, he asked, could the respondent be permitted to retain a payment referable to profits on a transaction in circumstances where it had emerged that there were none? How, as a matter of justice, he asked, could the respondent require an account of profits generated by the joint transactions without allowing for the substantial loss incurred in relation to one of them? The appellant's contention was, and is, that the logic of the judge's judgment of 1998 had been that he and the respondent were equal partners and, as such, in the ordinary way, should equally bear losses as well as profits.
45. In the light of the judge's refusal to entertain these claims, however presented, the justice of the appellant's claim that the respondent should share the loss has never been explored. Nor, I suggest, are we in this court in a position to explore it properly. It seems to me, however, that if the appellant decided, without reference to the respondent, to undertake a particularly risky transaction, outside the types of transaction canvassed at their meeting in 1992, a question would arise as to whether in law - or indeed in justice - any part of those losses could be visited upon the respondent.
46. At all events, I am clear, as was the judge, that the reference to `just allowances' in rule 6 did not entitle the appellant to bring in these claims. No authority has been cited by counsel upon the ambit of that rule or, now, the paragraph in the Practice Direction. In my view, however, the provision should not be so construed as to enable the parties to the taking of an account to demand a significant alteration of the parameters within which the account is to be taken. If not agreed, those parameters will be set by the court in judgment following the delivery of pleadings, the tender of evidence and the making of submissions. In this case it was following just such an exercise that the parameters were set by the judge in his judgment in 1998; and his determination was that an account should be taken in relation to the respondent's entitlement to one half of the commissions, fees, profits or other benefits from any source flowing from the twenty two transactions negotiated by the appellant. A direction was given for a Scott Schedule to be prepared in which the appellant would set out, among other matters, the price at which equipment was purchased and sold and any "arrangement or introduction fee or other benefit received by [him] from the supplier, customer or finance-house".
47. Thus in my view the appellant needed permission to re-amend his counterclaim in order to press the claims totalling £16,450. In this regard he faced the obvious argument that he was seeking to re-amend his pleadings after judgment had been given. But this argument, contended the appellant, was based on a misconception. He argued that, as at 1^st March 1999, the relevant judgment had not yet been given. He argued that the substantial loss which he made on the tenth transaction was always part of his evidence; that on his primary case, as articulated in 1998, that loss was for him to bear alone; that, by his judgment in 1998, the judge rejected his primary case and directed an account; and that the appropriate time - or at any rate an appropriate time - for him to articulate these claims was once the account had been directed to be taken.
48. These arguments of the appellant were rejected by the judge. He held that the obvious place for the appellant to have articulated these claims would have been in the pleadings before the court at the hearing in 1998. He held that it had been open to the appellant then to plead, without prejudice to his primary defence, that were the respondent's case for equal division to be accepted, the division must also include losses and in particular the loss referable to this transaction.
49. It is relevant to note how in 1998 the appellant had cast his counterclaim for £6,400. His primary case was that, just prior to the final transaction negotiated by the respondent upon his introduction, they had agreed that the respondent would pay him £6,400. But, by paragraph 13 of the amended counterclaim, the appellant pleaded:
"Further or in the alternative, if which is denied there was any agreement between the parties as is alleged in paragraph 3 of the Statement of Claim, the [appellant] avers that all provisions of the oral agreement were reciprocal, accordingly he would be entitled pursuant to the oral agreement to 50% of the [respondent's] commission of £12,800 on the said transaction."
50. Counsel appearing for the appellant on 1^st March 1999 conceded, as has Mr Salter, before us that it would have been open to the appellant to have made his claim for £16,450 in analogous format at that time. The argument is simply that, though possible, such was not necessary. The problem for the appellant is that the long hearing in 1998 and the meticulous judgment given at the end of it were devoted to the ascertainment of the terms of the agreement between the parties and in particular whether all profits should be shared. In my opinion the obvious time for consideration to be given to what if anything the parties agreed in respect of losses, and to whether the loss generated on the tenth transaction was within the scope of any agreement which encompassed losses and should be included in any direction for an account, was at that hearing.
51. Until this point I have withheld from the judgment a fact which, in my view, makes the judge's refusal to permit the proposed re-amendment unassailable. I have referred to the fact that, by June 1998, the counterclaim had been amended. The amendment had been made pursuant to leave given by the judge in February 1998 and its effect was to delete from the pleadings a counterclaim which the appellant had originally included referable to this tenth transaction. Mr Salter stresses that the original counterclaim had only sought repayment or credit of the sum of £1450 and had not also sought payment or credit for the sum of £15,000. That counterclaim, thus limited, had been founded upon the following pleading:
"It was an implied term of the agreement between the parties, implied by custom and usage of brokers within the TV and associated industries equipment finance field, that if either party paid a fee to the other for the introduction of business and such business thereafter proved loss-making, the party who had been paid a fee would share the loss to the extent of refunding the fee."
52. Why had this part of the counterclaim been deleted? In his oral evidence in 1998 the appellant explained, in passing, that the relevant documentation had been sketchy. There was no need for him then to elaborate on the problem to which he was referring. In refusing on paper the appellant's application for permission to appeal, the single Lord Justice speculated that the appellant had made a tactical decision not to pursue a counterclaim which might undermine his primary case. But, whatever the explanation for the amendment, the fact is that the counterclaim referable to the tenth transaction fell away. Nor did the appellant by his lawyers explain, whether to the court or to the respondent, that, in the event of a finding on the main issue adverse to him, he intended to reintroduce a counterclaim referable to this transaction. Had that been made clear in 1998, it would no doubt have provoked debate as to the proper time for the articulation of such a claim.
53. In his second witness statement dated 1^st June 1998, the appellant could not more clearly have explained his stance in relation to the loss on the tenth transaction:
"My Counterclaim in respect of the "Mag Masters Ltd" transaction completed in March 1993 was abandoned by me at the directions hearing before His Honour Judge Hallgarten on 25^th February 1998. I have accordingly lost the sum of £30,000 which I advanced to the customer as part of this transaction in addition to the sum of £1450 which I gave to [the respondent], which again illustrates the financial risks I frequently bore. In these proceedings [the respondent] is seeking a fixed share of my profits - at no time has he shown any willingness at all to bear any financial risk or to contribute to any part of my losses."
54. So it was clear that the loss of £30,000 and the alleged overpayment of £1450 were to be no part of the appellant's case. This representation was of profound importance for reasons well expressed by the judge, in refusing permission to re-amend, as follows:
"Finality is important and it seems to me that what the parties could have dealt with at the hearing they should have dealt with at the hearing in order to create that finality...Where the parties realise what the odds are on one side against the other, they are able to reach an informed view about whether the case is worth fighting or should be settled. [The respondent] fought the case on the basis of the particular cards that had been disclosed by the[appellant] and the cards that he had in his own hand. The case might well have taken a completely different course had this particular issue been there, £15,000 in particular being the kind of sum which may well have cancelled out the entirety of [the respondent's] claim."
55. His task necessarily being to demonstrate that the discretionary exercise which the judge conducted was flawed, Mr Salter argues to us that the judge placed too great weight upon the appellant's delay in articulating these claims and correspondingly too little weight upon the relative prejudice to the parties which would flow from the decision, so great for his client in the event of a refusal of permission and so slight - or at least so remediable in costs - for the respondent in the event of grant. But, in the passage quoted, the judge clearly, and in my view fairly, weighs the extreme prejudice that would flow to the respondent from the effective re-introduction, following abandonment, of what in the context of the case was a very substantial matter the proper time for the consideration of which had now passed.

56. Far from being clearly wrong or otherwise at fault in his conduct of the discretionary exercise, the judge was in my view right to refuse permission to re-amend the counterclaim. So I would dismiss the second appeal also.
Schiemann L.J.:
57. I agree.
LORD JUSTICE PETER GIBSON:
58. I also agree. But in deference to the arguments attractively presented by Mr. Salter Q.C. for the Appellant, Mr. Rushmer, I add a few words of my own.
59. The main appeal is an appeal not on law but on fact and as such it faces obvious difficulties. But Mr. Salter submitted that the Judge's findings were vulnerable because he did not adopt what Robert Goff L.J. suggested was the right approach in The Ocean Frost [1985] 1 Lloyd's L.R. 1 at p. 57:
"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 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."
Mr. Salter said that where the comparative veracity of the Respondent, Mr. Dickinson, and Mr. Rushmer is tested (1) by reference to their motives, and (2) by reference to the objective facts proved independently of their testimony and the overall probabilities, the court should conclude that the Judge was clearly wrong to accept the evidence of Mr. Dickinson as to the terms of the agreement made at the Kettner's meeting. He further submitted that the Judge's conclusion was based not on the views formed by observing the witnesses give evidence but on the plausibility of the Respondent's case and that this court should be prepared to depart from the conclusion of the Judge.
60. Robert Goff L.J. was not laying down a universal test for determining the veracity of witnesses in all types of cases. He was merely saying that in cases of fraud he had found it essential to do what he described. Unlike The Ocean Frost , the present case is not a case of fraud. In the ordinary case like the present, how a judge will decide on a witness's veracity will depend on the particular circumstances and for my part I think it would be wrong to seek to lay down any absolute requirement for determining what is essentially a matter for the judgment of the judge. I do not doubt that in many cases, even where there is no fraud alleged, the judge will test the veracity of witnesses in the way suggested in The Ocean Frost. But a judge cannot be shown to have erred for not adopting that test.
61. In the present case we have a manifestly careful and detailed reserved judgment of an experienced judge who has frankly acknowledged the difficulty he had in determining where the truth lay. There was no contemporaneous documentation relating to the oral agreement at Kettner's and, as the Judge said, a good deal turned upon the reliability of the recollections of the two major protagonists, seeking to recall what passed between them 6 years previously, and upon their credibility. The Judge plainly regarded Mr. Dickinson as an unsatisfactory witness whose evidence on a number of points was either acknowledged by himself to be wrong or was held to be wrong, and Mr. Salter has rightly drawn attention to those matters. But all the more serious matters were expressly noted by the Judge, and it does not follow from the fact that a witness has been found not to be credible on specific points that he must also be disbelieved on other points. The Judge also found that Mr. Rushmer's evidence was "in many ways equally unsatisfactory". In that assessment I cannot see how this court could say that the Judge misused the advantage which he had over this court in having seen and heard Mr. Rushmer give evidence. For the reasons given by Wilson J., the Judge was entitled to take that view.
62. In attacking the Judge's conclusion on what agreement was reached at the Kettner's meeting, Mr. Salter in my view overstated the strength of Mr. Rushmer's position vis-à-vis Mr. Dickinson. Of course Mr. Rushmer's contribution to the joint venture was important, but so was Mr. Dickinson's. He had an extensive list of contacts and great knowledge of the specialised industry in which they were to be collaborating. The Judge's conclusion of a 50/50 split was supported both by Mr. Palmer's evidence and in particular by the fact that that was the basis agreed by Mr. Rushmer with Mr. Savage for the M2 Video transaction, although it was of type B.
63. I am not impressed by the further point taken by Mr. Salter before us, although not taken below, that the agreement was too vague to be enforced. Mr. Dickinson's case on the content of the agreement was not pleaded as precisely as it should have been. But there was no doubt at the trial what his case was, and in my judgment the judge was entitled to take the view that Mr. Dickinson had discharged the burden on him of proving that case.
64. On the application for leave to appeal from the Judge's refusal to allow an amendment to the Defence and Counterclaim, whilst I would concur in giving leave, I would dismiss the appeal essentially for the reasons given by Potter L.J. when refusing leave to appeal on paper. In the Statement of Claim Mr. Dickinson had claimed damages and an account. Mr. Rushmer, by para. 9 of his original Defence and Counterclaim, had pleaded that if, which was denied, any sums were due to Mr. Dickinson from him, he would seek to set off the sums due to him under his Counterclaim from Mr. Dickinson. He then in paras. 11 to 14 of the Counterclaim referred to the transaction with Magmasters, pleading expressly in para. 14 that he had made a loss of £30,000 on the transaction. But all that he then claimed from Mr. Dickinson in respect of that transaction was the fee of £1,450 paid by him to Mr. Dickinson which Mr. Dickinson refused to refund. Paras. 11 to 14 and the claim for £1,450 were deleted by the amendment for which leave was given on 25 February 1998. As he himself described it in his Witness Statement, Mr. Rushmer abandoned his counterclaim in respect of that transaction. Had he maintained that claim and extended it to include half of the claimed £30,000 loss, there may have been two consequences. One might have been to cause Mr. Dickinson to reappraise whether it was worth his while pursuing his claim when so substantial a counterclaim was made against him. The other and, in my view more certain, outcome would have been the investigation at the trial of the claimed loss.
65. In my judgment, therefore, it was not by reason only of the delay on the part of Mr. Rushmer in putting forward the claim in respect of the loss until after the trial that the Judge refused the amendment. To allow the late amendment would have prejudiced Mr. Dickinson in a way for which he could not be adequately compensated. That exercise of discretion by the Judge was in my opinion unquestionably right.
66. For these as well as the reasons given by Wilson J. I would dismiss these appeals.
Order: Appeal dismissed. Appellant to pay respondent's costs of the Appeal and Application for PTA, subject to detailed assessment if not agreed; stay of execution of the judgment imposed (by HHJ Hallgarten) on 7^th June 1999 be removed; stay of assessment of the costs of the action and the taking of account imposed by the judge on the same day be removed; and that there be payments to the respondent of the sum of £16,299, plus interest paid into court to the credit of the action. Order does not form part of approved judgment.