(1) Charles Villeneuve (2) Kyoto Securities Ltd v (1) Joel Gaillard (2) G Holdings Ltd

Facts

When hearing a civil appeal in which there was sufficient documentary evidence to enable it to reach safe conclusions, the Court of Appeal of the Bahamas had been right to set aside the judgment below and to substitute its own conclusions on the merits.

Abstract: The first appellant (V), who controlled the second appellant company (K), appealed against a decision of the Court of Appeal of the Bahamas giving judgment in favour of the first respondent (J), who controlled the second respondent company (G). V and J were businessmen who each controlled a number of companies and engaged in investment transactions. J had suffered heavy losses on his investments and claimed that those losses had been caused by V. He brought a claim against V alleging deceit and breach of duty of care. His case was, essentially, that V had acted as his investment advisor and that, in reliance on V's advice and misrepresentations, he had made a number of loss-making investments. The trial judge, who had formed a very unfavourable impression of J, found that V and J's relationship had not been one of investment advisor and client. On that basis, he dismissed J's claim. The Court of Appeal found that the judge had reached his conclusions in the absence of any reasoned analysis of the undisputed evidence and that he had failed to address the issues in the context of the totality of the evidence. It concluded that it was therefore entitled to make its own findings rather than ordering a new trial before a different judge. It set aside the judgment, found V to have been guilty of fraud, and gave judgment in favour of J. The issues were whether it was right to have (i) found that the trial judge had erred so badly that his order had to be set aside; (ii) substituted its own conclusions on the merits.

Appeal dismissed. The Court of Appeal was right in its view that the judge had failed to perform his duty of checking his impressions of the witnesses by reference to the contemporaneous documentary evidence and to the probabilities of the situation. He had wholly ignored some of the most important documents in the case and appeared to have misread J's statement of case. His judgment was deplorable, and the Court of Appeal was right to have recognised that the issues were at large and was right to have considered the case on its merits rather than ordering a new trial. There was sufficient material in the documentary evidence and the transcript to enable it to reach safe conclusions. However, it had not been necessary for it to have found V to be guilty of fraud. While his conduct had been dishonourable, it would have been better if the Court of Appeal had refrained from making a finding of fraud. Save for that and one other matter, all the Court of Appeal's findings on liability would be upheld (see paras 67-69, 86-88 of judgment).

You can download the full judgment here.