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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Newman v Folkes [2002] EWCA Civ 591 (3rd May, 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/591.html Cite as: [2002] EWCA Civ 591

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Newman v Folkes [2002] EWCA Civ 591 (3rd May, 2002)

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN’S BENCH DIVISION
(Mr Justice Garland)

		Royal Courts of Justice Strand, London, WC2A 2LL
		3rd May 2002

Lord Justice Ward :

1. Almost exactly six years ago Mr Richard Lance Newman was driving his wife’s Mercedes on the M20 in Kent. It was 10 p.m. and it was dark. Little did he know that ahead of him the defendant had lost control of his motor car when a tyre burst, had crashed into the central barrier and had come to a stop in the outside lane at an angle of about 45 degrees to the barrier. The Mercedes struck the Montego at speed. The defendant’s passenger was killed, the first defendant was very severely injured. Mr Newman’s passenger, his sister-in-law, suffered major disfiguring laceration and her two children in the back sustained fractures. Mr Newman himself, the claimant, was also badly hurt. He suffered a fractured dislocation of his right hip, other fractures to the clavicle, fibula and thumb, severe facial injuries and, most importantly, a closed head injury which at the subsequent trial of his claim for damages for those personal injuries gave rise to much controversy.
2. The matter was heard by Garland J. over nine days in May 2001 and judgment was given about a fortnight later on 25^th May 2001. Liability had not been in issue at the trial and the claimant’s contributory negligence (because of his failure to wear a seat belt) had been agreed at 25%. The judge was concerned only with quantum. The principal heads of claim in issue before him, apart from general damages and relatively minor items of special damage, included past and future loss of earnings and the cost of past and future care.
3. Before the judge could resolve future loss, he had to decide the controversial issue relating to the head injury. The collision had involved rapid deceleration and such a severe impact to the claimant’s head that it fractured the claimant’s teeth and caused him to bite clean through his lower lip into the gum. The question was whether the impact had also had caused a significant brain injury. The defendants, whilst accepting that he had undergone a significant personality change as a result of this accident, ascribed his present condition to a post-concussive syndrome which would not disable him from work and would not pose too many demands on his memory. The claimant, on the other hand, asserted that the head injury caused organic damage to the temporal lobes of the brain and that this closed head injury had produced a significant personality change and a cognitive defect making the claimant unable to organise himself, progress his ideas or control his impulses. The judge distilled from the evidence that the personality change, accepted to be “significant”, had:-

“turned a man who was loud, direct, amusing, a good father and stepfather, who was considerate and talked things through with his wife, who could get on well with all sorts and conditions of people and who was never crude or offensive, into someone who is lacking in affection, at times aggressive and violent, embarrassingly rude and crude, unable to differentiate between a joke and inappropriate behaviour, childlike, obsessive, arbitrary and dictatorial and liable to temper tantrums.”

The judge accepted that the claimant had suffered a brain injury of sufficient severity to cause temporal lobe damage. He accepted the claimant’s medical evidence that he would not benefit from psychological treatment and that there would be no spontaneous improvement in his cognitive state. Consequently, and as a result of the brain damage, the claimant was held to be “unlikely to be able to apply himself creatively to his own business again and … unemployable”. There is no appeal against that finding, nor against the award of £70,000 for general damages.

4. On the basis of those findings, the judge then dealt with loss of earnings and cost of care. In summary he found that the claimant had lost £30,000 of earnings as a motor trader in the first year after the accident, that his loss of earnings for the successive years was £32,250 and so the damages for past loss of earnings were assessed at £159,000. The judge reduced the conventional multiplier of 16.61 to 12 to reflect the uncertainties of the claimant’s prospects and so assessed the future loss of earnings at £387,000. Given that his change in personality was permanent, he needed to be looked after for a few hours a day, that care being given to him by his wife. Without making any discount from the commercial rates paid to care assistants, he awarded £109,000 odd under this head. In all and with interest added the claim was assessed to be worth some £815,000 subject to the reduction of 25% for the claimant’s contributory negligence.
5. The defendants now appeal with leave of Brooke L.J. against the awards for the past and future loss of earnings and past and future care. Garland J. gave the claimant leave to appeal against his reduction of the multiplier conditionally on the defendant being given permission, which he had refused, to challenge the future loss of earnings award.

As to loss of earnings.

6. Mr Michael Kent Q.C. forcefully, and with a certain amount of justification, submits in short that Mr Newman’s case is so egregiously unsatisfactory that the learned judge should not have believed a single word of it, should have held that the claimant had simply not proved his loss of earnings claim and should, therefore, have awarded him only a Smith v Manchester Corporation sum to compensate him for the loss of earning capacity caused by the injuries. Alternatively he submits that the annual loss of earnings figure should be heavily discounted.
7. The main case presented by the claimant was little short of being scandalous. He was claiming nearly £285,000 for his past loss and over £1m. for his future loss. He was asserting that he had lost approximately £58,000 per annum net in the years before the trial and that his future loss of earnings would exceed £61,000 net. The foundation for much of that claim was found to be a concoction of lies and deceit.
8. As to his pre-accident work, as the judge held in paragraph 8 of his judgment:-

“I am in no doubt that the claimant will be unable to return to his pre-accident work as a motor trader, but I have also to consider whether he would, but for the accident, have accepted employment on very generous terms with The Complete Cable Co. Ltd., or, when it went into liquidation, similar employment as a Sales Director or Sales Manager. As to his pre-accident work, there is very substantial difficulty in establishing what his level of earnings was because he has never, since starting work, paid a penny of income tax or National Insurance contributions, and has no books or accounts apart from a few invoices and accounts prepared without supporting documents for the purposes of this claim but which have not been disclosed to the Inland Revenue. In addition, no former employer, nor the claimant himself, has been able to produce reliable evidence of earnings.”

9. That is hardly a helpful start for the claimant. It gets worse. He served a Civil Evidence Act Notice which purported to set out a history of his last five periods of employment from 1989 to July 1995. Various letters purporting to be from his employers were produced and the reason for the notice was stated to be that the authors of the letters could not be called because they were abroad or could not be found or were not prepared to give evidence. The information contained in those letters was collated by a bookkeeper, a Mr J.A. Lubert, who plays a sinister part in this case and perhaps for that reason did not give evidence in it. He produced an employment record for those years adding figures for earnings which sometimes did not appear on the face of the documents in the Civil Evidence Notice itself. It differs, moreover, from his typed record of employment. He kept a notebook purporting to record income and expenses from which a Mr Lawrence Cowan, a chartered accountant, prepared trading accounts for the claimant as a motor trader up to the date of the accident. Mr Lubert also advised Mrs Newman on how to fill in a claim form for incapacity benefit which has featured prominently in the appeal.
10. The judge subjected this material to very careful scrutiny. I need not cover the ground in the same detail. It is enough to summarise the case of these five so called employers in this way.

i) Mayfair Motors. A Mr R. Joyce was said to trade as Mayfair Motors. He apparently wrote on about 3^rd December 1989 to the manager of the claimant’s building society informing him that the claimant had an income in excess of £30,000 holding down the permanent position of sales manager with the company. According to Mr Lubert, the claimant had worked for them for eight or nine years. Mr Joyce later informed the claimant’s solicitors that Mr Newman had started as a salesman, had been promoted to sales manager and then to general manager of this business and at the time of his leaving when the business was sold late in 1989 his salary and commission exceeded £40,000. Mr Lubert is more precise. It was £42,000. Where he got that from, goodness only knows. With the turnover that would justify that level of salary, the business ought to have been registered for VAT. Of course it was not. What, however, is so very curious about Mr Joyce’s letter to the claimant’s solicitors is that he writes from an address “128 High Street South, Eastham, London E11 1PS”. Not only is the borough mis-spelt but the postcode is also quite inappropriate for that address. Astonishingly, it is Mr Lubert’s postcode. Mr Joyce was not called to explain any of this.

ii) Employment by the Wright Brothers. At first it was said that the claimant worked for Anglo-European Communications but the duration of that employment varied. Mr Wright gave an address which again happens to have been mis-spelt. He was said to have been employed by one of their companies, Export (U.K.) Ltd., at a time when the defendant’s enquiries revealed that the company had already been put into liquidation. He produced a P60 issued by Wrights (U.K.) Ltd. and two wages envelopes purporting to show the deduction of tax but none of these were received by the Inland Revenue. As the judge observed, “The claimant himself was singularly unable to describe what he did or how much he was paid”.

iii) Russell Foster Holdings Ltd. The supporting letter says that the claimant worked in Marbella as “a 15% Closer, which in layman’s terms gave him an earning capacity of £1,000 and £1,500 per week minimum”. The dates of that employment varied.

iv) Vestrissa Vacation Club. This letter purported to be signed by Vivien Osborne but another copy of the same letter reveals that she was there signing “pp. F.T. Peacock, President”, who just happens to be the claimant’s father-in-law. The list of officers of Vestrissa was admitted in the Civil Evidence Act Notice. One of the Vice-Presidents, a Mr Joseph Ferro, signed a witness statement but did not in fact give evidence to support his offering the claimant employment in Spain. The judge found that “the Vestrissa material was produced to assist the claimant … I attach no weight to any of the Vestrissa material”.

11. The claimant asserted that he did not wish to work abroad and that an offer of work from the Complete Cable Co. Ltd. was more attractive to him. That was one of a number of companies promoted by a Mr James Cloke, all of which subsequently went into liquidation. Mr Cloke was disqualified from holding any directorship for ten years. The Complete Group Ltd. was dissolved in November 1999. As the judge held:-

“It was therefore surprising that his witness statement dated 20^th August 2000 should begin “I am a director of The Complete Group Ltd.”. He had resigned in August 1998, the company was dissolved in November 1999 and he had in any event been disqualified in September 1988. The short sentence was a triple untruth which, in my judgment, wholly destroys James Cloke’s credibility and reflects little credit on those concerned with the preparation of his witness statement. His assertion in cross-examination that when he signed his witness statement he believed he was a director of The Complete Group Ltd. was a further blatant untruth. The facts speak for themselves.”

Moreover the letter purporting to offer the claimant employment was dated 15^th March 1996, yet the Group was not incorporated until 17^th May. The judge held:-

“”I am not persuaded that the offered contract was genuine. The letter was produced on stationery which came into existence during or after May 1996. I reject James Cloke’s explanation. He is unworthy of credit.”

12. A Mr Dean Clarke stated he would have offered the claimant a position as Sales Director with Complete Freight Services but the judge found that it was “open to question whether such an enterprise could sensibly have supported the claimant”.
13. In that way the whole of the factual evidence called in support of the claimant’s case was demolished. The judge rejected the offers from Vestrissa and Complete Cable as wholly unreliable. That left the claimant’s case relying on an earning survey produced by Michael Page Sales & Market who described themselves as “the market leaders in sales management, field sales and marketing recruitment”. The forensic accountant called on his behalf suggested he might qualify for employment as a sales director but had to accept that there was no evidence that he had done anything more than face-to-face sales. The defendant’s forensic accountant referred to the Reward Group classification of companies which the judge thought was much more realistic but he held in paragraph 42:-

“What was wholly lacking was any evidence of what the claimant was capable of doing beyond trading cars, closing time share deals or selling mobile telephones. There is no evidential basis for applying the Reward Group Tables let alone the Michael Page ones. I do not know what the claimant did at Anglo European or Export (U.K.) Ltd. or what he might have been capable of doing but for the accident. The only foundation, and that is not a particularly firm one, is the period up to April 1996 when the claimant resumed trading cars. I must, however, turn to the point of law raised by Mr Kent Q.C. ...”

14. The point there urged on the judge was that the claimant was not entitled to recover anything under this head as he had never paid tax or National Insurance contributions. Mr Kent had no evidence to suggest, and very properly did not suggest, that the claimant’s earnings were dishonest in any other respect. The judge held:-

“For the purposes of the present of the instant case, I am in no doubt that the claimant’s failure to pay tax and National Insurance contributions in no way debars him from advancing a claim for lost past and future earnings although adjustments will have to be made to reduce whatever gross sum I determine to be the claimant’s pre-accident income to what would have been left in his hands after payment of what was properly due from him had been made.”

Quite correctly, in my view, there has been no appeal against that ruling.

15. In order to ascertain how the judge did determine the source of the claimant’s pre-accident income and its amount, it is necessary to pick up pieces of the jigsaw from various parts of the judgment. I have already referred to paragraph 8 of his judgment where he concluded that the claimant would not be able to return to his “pre-accident work as a motor trader” and where he referred to the “very substantial difficulty in establishing what his levels of earnings was because he has … no books or accounts apart from a few invoices and accounts prepared without supporting documents for the purposes of this claim”.
16. When dealing with the controversial medical evidence, the judge had occasion to refer to the varying accounts the claimant gave the various medical experts of his pre-accident activities. They ranged from his running “a successful luxury car business” to his being “an extremely successful businessman” who had built up “an impressive business career” part of which involved working with his father-in-law in Spain. What he was claiming to have done was in dispute. The judge said in paragraph 23:-

“In fact it was far from clear precisely what the claimant was doing during the period he spent in Spain and from September 1995 to April 1996 he was, in effect, acting as a commission agent for other motor traders buying or selling on Mercedes, BMWs and people carriers for them. The precise nature of his activities only became clear when I gave permission for three witnesses to be called with whom the claimant had worked, John Stevens a former motor trader, William Jacobs who until 1998 had dealt in vans, mini-buses and light trucks, and Stephen Cregan a former Business Manager and Acting Sales Manager for a Mercedes main dealer. They described the claimant’s detailed knowledge of the refinements and variations of Mercedes specifications, his ability to find the car which matched a potential buyer’s requirements, how he seemed to be able “to get at ‘Exchange and Mart’ before anyone else”, and know where he could sell a car for a good price. He used to attend auctions, buying on William Jacob’s credit, but only exceptionally bought and sold on his own behalf. He could be trusted to take a car to a potential buyer and come back with a Banker’s Draft. Steve Cregan valued his ability to find buyers for traded-in cars which the main dealers did not like to have standing on the forecourt for more than ninety days. For these services he would be paid a commission.”

17. Dealing with the claimant’s and Mrs Newman’s evidence the judge recorded in paragraph 32:-

“The claimant said he liked to have £1,000 per week in his pocket. Mrs Newman and Dionne [his stepdaughter] were never short of money. The claimant serviced a £150,000 mortgage. At one time they owned a villa in Spain. They took holidays in Florida. The claimant bought expensive jewellery for Mrs Newman. Mr Segal, the ForensicAccountant called by the defendants, has analysed the claimant’s earnings as evidenced by his invoices (which are almost certainly not complete) and the list of expenses compiled by J.A. Lubert but not supported by appropriate invoices, vouchers, etc. These calculations are in paragraph 67 of his report and, adjusted for VAT, would show an annual profit of £42,365 based on 229 days of actual trading.”

18. Then his conclusions were made in paragraph 49 as follows:-

“Mr Segal calculated the claimant’s annual profit, after allowing for VAT, at £42,362. In Appendix 6(b) he makes the appropriate calculations for tax and National Insurance. Mr Gardiner Q.C. suggested that I should to some extent work backwards from the claimant’s lifestyle. I decline to do this without knowing, as Mr Segal put it, how the claimant obtained his money, and thus keep without the reasoning in Duller. I am prepared to make the concession that the invoices may not be complete and will therefore round up the gross earnings by a small amount and assume an income net of tax at a flat rate of £32,250, with £30,000 for the tax year 1996/97.

50. I have already held that, on balance of probability, I do not consider that the claimant will return to work. In any event, he would be in the “benefit trap” and, as Mr Segal points out, would have to earn approximately £26,000 to improve on his present situation on benefit.

51. The defendants questioned whether, because of future uncertainties, the multiplier/multiplicand approach is appropriate: should there simply be a Smith v Manchester award, or should I adopt the approach in Blamire v South Cumbria Health Authority [1993] PIQR 21 of taking a lump sum where calculation is inappropriate? What I propose to do, to reflect the uncertainty of an occupation which, on the evidence, depends on maintaining contacts and networking, and the existence of an active market in which the trader’s expertise lies, is to take a lesser multiplier than to aged 65 (which is agreed at 16.61) of 12. This, in my view, adequately reflects the uncertainties of the one-to-one sales world. It may well be that the claimant would have chopped and changed and gone where the deals were to be found, but what they might be and how lucrative remains matters for speculation.”

The challenge to the judge’s findings.

19. To summarise Mr Kent’s submissions, which he supported by detailed reference to the documents and to the evidence, the appellant’s case is:-

i) Having rejected the claimant’s main case as having been dishonestly fabricated the judge ought to have been wary before accepting the alternative case.

ii) At face value the invoices were totally unsatisfactory and called for full explanation.

iii) The judge failed adequately to explain why he accepted the genuineness of those invoices.

iv) He ought to have found from the evidence of Mrs Newman that some of them at least were forged.

v) In all the circumstances of the case he ought not to have been satisfied that the claimant had discharged the burden of proof which lay upon him to prove his special damages and so ought to have made a Smith v Manchester Corporation award or substantially reduced the amount claimed.

20. The invoices are indeed open to criticism. They run in a series from 9000 to 9156 but not all of the number are included in the bundle. I do not know why not. They are on printed notepaper for “Richard Newman Autos”. Details about the addressee were sparse: usually only a name but never a proper address. Mr Kent made the point in cross-examination:-

“Q. And in none of them so far as I can see is there anything which identifies the particular transaction. It does not mention the car or cars involved, the total price, registration number or anything else about it; why is that?

A. That is the way it goes.”

21. The judge intervened to ask questions about the other parties to these transactions and received some clarification but at the end he was “still slightly mystified”. In his judgment the judge said that the foundation for the claim was “not a particularly firm one”. As he explained further in a judgment on costs:-

“… a considerable part of the case, although not the greater part of it, was spent either in exploring matters which I rejected utterly, or explaining matters on which I have relied but which were not explained up to the moment that the claimant left the witness box.”

22. There was an even greater question mark about some of these early invoices. They were written in the hand of Mr Lubert. In every other instance where Mr Lubert’s hand graced the pages, the judge seems to have had no difficulty in finding that the documents were wholly unreliable. Not to put too fine a point upon it, submits the appellant, those invoices should be regarded as much as forgeries as were the letters attached to the Civil Evidence Act notice.
23. Mr Kent goes further. He submits not only that the invoices at the beginning of the relevant period commencing in September 1995 were forged by Mr Lubert, but also that those numbered 9074 dated 6^th January 1996 to 9156 dated 10^th May 1996 inclusive must also have been fabricated. That would follow if it were true that before his accident on 26^th April 1996 he had last worked as a self-employed person in January 1996. That was a statement made by Mrs Newman in a claim she made on her husband’s behalf with Mr Lubert’s help for Incapacity Benefit. Cross-examined about her completion of that form she said:-

“I wasn’t aware that I gave incorrect information. I put everything in to the best of my ability. … I wouldn’t like to put anything wrong. I am not that type of person. I wouldn’t like to be dishonest with any form.”

I should recite other passages.

“Q. You describe your husband’s occupation as self-employed work/car sales, buying and selling cars from June 1995 to January 1996. Was that correct? A. That’s what I thought, yes.

Q. Yes, but was it correct? A. I am sorry, yes.

Q. In fact you were not in a muddle about that bit? A. I did my best with the form. I am not very good with forms, as I have said. I did my best. I was under a lot of strain and I tried my best. That’s all I can say. I can’t say no more than that.

Q. Well, it would not have been very difficult if your husband had been out of work since January, that is for four months, for you to remember that and you did remember it and you put it down. A. I put that my husband was out of work.

Q. Well, you put that his period of self-employment went to January 1996. A. Mr Lubert advised me what to put.

Q. And at p.6, “When was the last date you worked for an employer or were self-employed”, [you wrote] “January 1996”. You could not have been confused about that. A. No, Mr Lubert would have advised me.

Q. Advised you of what? A. Of what to put in the form.

Q. Why would he have better information than you have? A. Because I had too much on my mind. My husband was very very ill and I was trying to cope with everything that was going on.

Q. … Do yourself justice. The possibility may be that all this is true and you have complied with the declaration. A. I’ve done my best. I wouldn’t lie intentionally. I tried my best to make it right on these forms. I’m not very good with forms.

Q. What I meant was the content of the form is all true --- A. Of course.

Q. --- Signed correctly by you under a declaration that there is nothing incorrect in it. A. To my knowledge I didn’t think there was.”

24. The judge dealt with that in this way:-

“In May 1996, Mrs Newman on the claimant’s behalf, applied for Incapacity Benefit. She said that she was assisted by Mr Lubert. On p.3 of the application it is said that the claimant was self-employed from June 1995 to January 1996 with the legend, in Mrs Newman’s writing, “Tried property selling and maintenance in Spain but could not get any work so came back home to try and start again in cars.” At p.8, in answer to a question about being abroad in the last four years, Lubert has ticked the “self-employed” box and written, “I tried property management but found insufficient clients to make it pay and after 7/8 weeks returned to U.K.” Mrs Newman was quite unable to explain these blatant untruths. Not surprisingly, Mr Lubert did not give evidence. Nevertheless, although I approach Mrs Newman’s evidence with caution, I have accepted her account of life with the claimant where it is supported by her daughter, Mrs Geddes [a neighbour] and Miss Somek [the care expert].”

25. Mr Kent submits that the finding about these blatant untruths begs the question whether or not Mrs Newman was herself lying when she recorded that her husband had ceased to be self-employed in January 1996. The judge ought, he submits, to have made a finding about whether or not that statement in the form was true. Mr Kent submits she was best placed to know whether he worked during that period. Her claim for this Invalidity Benefit was not likely to be enhanced by concocting that lie. Her evidence was that she was basically telling the truth as best she could. We are now invited to find that that part of her evidence was true and to find, as a consequence, that all the evidence about trading in 1996 was false.
26. It is, of course, correct that the judge made no express finding as to whether or not Mrs Newman was telling the truth in twice saying that Mr Newman had ceased trading in motor cars in January 1996 and he made no express finding whether he did or whether he did not so cease. So the criticism is not without its foundation. In fairness to the learned judge, one should bear in mind that although the point was obvious to the judge as he indicated when he gave permission to call the three motor traders, it hardly assumed the pivotal importance which it has taken on in this appeal. In this court the importance of the finding has become a vital cornerstone in the argument for rejecting, or at least not being satisfied with the whole of, this trading history. It is clear that the judge approached Mrs Newman’s evidence with caution and accepted her account of life with the claimant only where it was supported by other evidence. I must return to the question of whether or not that is enough to save the judgment from Mr Kent’s penetrating attack.
27. In my view the judgment hangs on paragraph 23 where the judge holds that “the precise nature of his activities only became clear” when he received evidence from the three motor traders with whom the claimant had done business. It is necessary to recall how that came about. The main thrust of the claimant’s case had related to past and future employment which the judge totally rejected. A claim based upon his earnings as a motor trader was very much the second string to the claimant’s bow. Whereas the defendant’s forensic accountant had admirably revealed the flaws in the main case, the alternative case received some but not intense scrutiny. The point was made that the invoices could not be matched to the bank receipts, which causes me no surprise since he dealt in cash, and there were no invoices to support the expenses claimed. The accountant concluded:-

“I do not consider that the motor trading accounts for the period to 26^th April 1996 can be relied upon until at least one source of contemporaneous evidence is provided to confirm their veracity.” Emphasis added to make the point that a period of unemployment was not being suggested.

28. The judge’s mystification as he expressed it during the evidence given by the claimant led to a late chain of enquiry by the claimant which produced the three new witnesses on the sixth day of the hearing. The judge’s reasons for giving permission for them to be called is not without significance. He said:-

“I must say, Mr Kent, that at the moment any scrap of information that might assist me in coming to a just conclusion would be welcome. Frankly I am in extreme difficulties at present in arriving at any conclusion about the earning capacity over what period of time and how it was achieved, let alone quantum.”

29. I have read their statements and the transcript of their evidence. Mr Stevens thought that the claimant had had “maybe about 10 to 15 cars … off me, maybe more” in 1995/6. He said he recorded transactions in his books but paper did not always pass between him and Mr Newman.
30. Mr Jacobs dealt mainly in light commercial vehicles but also had some dealings in the “high top motors”. He apparently identified 29 of the invoices. His evidence was interesting. He said for example:-

“In the car business, you know, like we wasn’t --- not everyone was up to grade on their paperwork and all that …

What I said to you before, it’s hard to explain if you haven’t been in this game, but we’re not professional with paperwork and all that, us sort of people. That was our living, and it was hard to chase people up for invoices without, you know. It was one of them sort of professions.

I know I dealt with Richard up to the time of his accident … I know Richard personally and I know we did do business with him up to them times …”

31. Mr Cregan was the Sales Manger at Mercedes Benz, Romford, at their London Road showroom and this was an obviously reputable business. They had vehicles such as BMWs, Bentleys that they did not wish to retail or Mercedes that they could not retail because of high mileage and apparently Mr Newman was adept in finding buyers for those vehicles. He did so for a mark-up or commission and usually supplied an invoice. Mr Cregan could find two invoices among those before the court. When it was pointed out to him by Mr Kent that there were only two transactions in the period September 1995 to May 1996 he said:-

“There would have been more than that definitely.”

Asked how he could be so sure so long after the event, he answered:-

“We wouldn’t have only just done the two because the amount of cars that we were getting in, different types of models, I was on the phone quite regularly to Richard just to get the cars underwritten and, you know, know about the cars. He would know whether the particular car suffered from certain oil leaks, or to avoid certain cars, you know so it was fairly active.”

He was also asked whether he was dealing with Mr Newman in 1997 and he said:-

“No, he stopped doing what he was doing because of the accident.

Q. You heard about the accident?

A. I did, yes. I am a friend of his brother-in-law.”

32. That evidence clearly changed the case. It gave the judge the help he was looking for when he permitted it to be given. The judge observed in paragraph 23 of his judgment that it was “far from clear precisely what the claimant was doing … from September 1995 to April 1996 …” All was made clear by these three witnesses. The judge clearly accepted their evidence. It included evidence that Mr Newman was dealing up to the date of his accident. It also provided the kind of corroboration for which the defendant’s expert was calling.
33. When the judgment is read as a whole I therefore have no difficulty in understanding why the judge found as he did. He may not have directly addressed the cessation of work issue in setting out his criticism of the Invalidity Benefit Form but quite clearly he treated Mrs Newman’s evidence with caution which suggests he was more inclined to disbelieve her than to believe her. He did accept the evidence of the three traders and that included evidence that Mr Newman was continuing to work. A finding that he continued to work up to the time of his accident was in the light of all I now know of this case wholly consistent with the probability. No good reason is given why this man who was clearly hardworking, albeit fiscally dishonest, should stop earning his livelihood doing what he did so well, dealing in motor cars, and suddenly give up the £1,000 per week he liked to have in his pocket. In my judgment the appellant wholly fails to persuade me that a finding that he worked up to the time of his accident was against the weight of the evidence. Once the authenticity of the invoices could not be challenged, the arithmetical consequence followed. The only question then is whether the judge was justified in finding that the record was not complete and that the true earnings were higher than those arithmetically computed. The appellants complain that the benefit of the doubt ought to have been given to the defendants. That flew in the face of the evidence of the motor traders that business was buoyant and that they did more business with Mr Newman than is actually reflected in the collection of invoices placed before the court, which was incomplete in any event.

Conclusion on the loss of earnings appeal.

34. I accept the criticism of the judgment that it might have been more fully reasoned but I firmly reject the submission that it was inadequately reasoned. As soon as the judge accepted the evidence of the three motor traders, all else fell into place. As soon as he accepted that Mr Newman traded until the time of his accident there was no need to doubt the veracity of the invoices as a whole. Having started very badly, the claimant did satisfy the burden of proof that lay upon him. There was evidence which the judge could accept and which the judge did accept to establish the annual loss of earnings. A Smith v Manchester Corporation assessment was not appropriate. I would therefore dismiss the appeal on this ground.

Residual earning capacity.

35. Paragraph 50 of the judgment which I have already recited is here under attack. It is suggested the judge erred in taking account of the “benefit trap” because once damages were received, benefits would cease. That may be so but by using the words “in any event” the judge was clearly making this a further reason, and not a justification for the earlier and vital conclusion that the claimant was not able to return to work. That was a conclusion he as well able to reach on his analysis in detail of the medical evidence and his preference for Doctor Priestley’s conclusions. It is submitted that the claimant’s medical witnesses based their evidence upon an assumption that the claimant was or would be an international businessman and the evidence was not directed to his “wheeling and dealing” in motor cars. The appellants rely upon an orthopaedic report that Mr Newman was capable of office work and driving work. The care expert recorded that in many respects he functioned adequately. Those factors may point the appellant’s way, but one only has to read the judge’s findings of the effect of the personality change to find confirmation that Mr Newman was truly “unemployable”. That was a finding of fact and in my judgment it cannot be said that the judge was so plainly wrong in reaching that conclusion open to him on the evidence that the Court of Appeal can interfere.

As to past and future gratuitous care.

36. The judge set out the dispute about past care and recited the respective contentions of each side. Future care was claimed at two hours per day “tending to the claimant’s obsessive needs, defusing potential tantrums and giving limited physical assistance”. The judge held:-

“I have considered whether, under this head, a multiplier/multiplicand approach is necessarily appropriate. It may be that the need for care will increase in the future if the claimant’s hip becomes troublesome. It may be that Mrs Newman will develop “defusing” techniques which make fewer calls on her time. On the other hand, if she should, for any reason, be unavailable, someone who is not a member of the family or immediately acceptable by the claimant would face a difficult task. On balance, I am persuaded that the claimant’s approach is fair and reasonable in all the circumstances and I propose to award the sums claimed both for past and future care.”

37. This is a case where gratuitous care had been and was being provided by Mrs Newman but where the figures were based on professional care rates. Mrs Somak, who gave that evidence, made it clear that “discounting is a matter for legal argument”. The defendants contended that her figures should be discounted by “the conventional” 33% or 25% or thereabouts. No discount was in fact allowed.
38. The evidence showed Mr Newman now to be an obsessive man, potentially violent, whose demands for attention could be made at any time of day or night. Examples were given of the occasion when he was travelling to Manchester and insisted that his wife had to be up at 5.30 a.m. to lay out his clothes. If he wanted to watch television at night and needed her company, she had to sit with him. Some marriages do not survive this sort of stress. One sees at once how difficult a task it is for the court to place an accurate figure on the number of hours that he needed and was going to need care in any week or month or year. One sees also immediately how difficult it would be to provide the care he needed if he needed it from professional carers. It is not as simple as a person under a disability who needs at certain regular hours of the day or night to receive some physical or medical attention. In his case no-one could tell at what time of day or night he would have a tantrum. Rates for unsocial hours were said to be at times 2½ times more than ordinary rates. The judge took flat rates. It was overall an assessment to be made in the round as much by feel as by mathematical calculation.
39. In my judgment the point taken by the appellants has effectively been answered recently by this court in Evans v Poltypridd Roofing Ltd. [2001] EWCA Civ 1657 where May L.J. said this:-

“… This court should avoid putting first instance judges in too restrictive a straight-jacket, such as might happen if it was said that the means of assessing a proper recompense for services provided gratuitously by a family carer had to be assessed in a particular way or ways. Circumstances vary enormously and what is appropriate and just in one case may not be so in another. … The assessment is of an amount as a whole. The means of reaching the assessment must depend on what is appropriate to the individual case.”

40. There is, therefore, no conventional discount. Each case depends upon its own facts. In this case there was such a broad margin of matters to take into account that the matter had to be looked at in the round. That is what the judge did. I can see no error of principle, nor did the exercise of his judgment produce a figure which can be said to be plainly wrong. I would, therefore, dismiss the appeal against that head of damages.

The cross-appeal on the reduction of the multiplier.

41. Mr Gardner soon accepted that as he only sought to appeal against that part of the judgment if the defendants could successfully attack the basic findings, he could not realistically proceed if the appeal was to be dismissed. He was, in my judgment, right to make that concession. The claimant’s case was redolent of uncertainty and the judge was in my judgment fully entitled to discount the multiplier to take account of the added vicissitudes of life for this claimant. I would, therefore, dismiss the cross-appeal.

The result.

42. In my judgment both the appeal and the cross-appeal should be dismissed.

Lord Justice Sedley: I agree.

Mr Justice Sumner: I also agree.

Order: appeal dismissed; cross-appeal dismissed; appellants to pay respondent's costs of the appeal (not to include costs of the cross-appeal), to be subject to detailed assessment on the standard basis if not agreed; detailed assessment of respondent's publicly funded costs of the appeal and his cross-appeal; stay on the payment of £200,000 damages lifted and that sum plus interest paid within 21 days by the appellants to the respondent's solicitors.
(Order not part of approved judgment) PRIVATE