WITNESS STATEMENTS CANNOT REPLACE PLEADINGS &"CUT AND PASTE" WITNESS STATEMENTS ARE UNLIKELY TO IMPRESS
In Chong -v- Alexander  EWHC 735 (CH) Richard Spearman Q.C. (sitting as a Deputy Judge) had to consider several issues relating to statements of case and witness evidence.
“…the typographical error (“At” instead of “As”), is replicated in a number of the other witness statements served on behalf of the Claimants. This repetition of the same text suggests that the witness statements do not contain the witnesses’ own evidence. The failure to correct the typographical error suggests that the witnesses have not read their statements with care.”
- It is inappropriate for Particulars of Claim to refer to a witness statement in place of setting out the claimants’ case.
- The vague way in which the claimants’ case had been pleaded had led to an unnecessary escalation of costs.
- The fact that a witness statement was argumentative did not assist the court.
- The fact that certain key phrases (and grammatical errors) were repeated in witness statements indicated that they statements were not not witnesses’ own evidence and that statements had not been read with care.
- Although the claimants had been largely successful, and a counterclaim had succeeded in part, the appropriate order in this case was no order for costs.
The action concerned a dispute between leaseholders of a block of flats.
PRESENTATION OF THE CASE
“The presentation of the rival cases
There were a number of features of the way in which the case was prepared for trial and presented at trial which increased the difficulty of resolving the issues which I am called upon to decide. They also exacerbated the risk of losing sight of the wood for the trees. They included problems with the way in which the claim had been pleaded, issues about the contents of the witness statements, serious allegations that a number of documents upon which Mrs Alexander relies had been forged (apparently by her, or at her instigation), and a process of rolling disclosure which continued up to, during, and even after the 5 days of the trial hearing. “
THE UNUSUAL NATURE OF THE CLAIMANT’S PLEADED CASE
Paragraph 3 of the Particulars of Claim pleads that: “The full details relating to this Claim are comprehensively set out in the Witness Statement of Mr Joseph Edward Kennedy, dated the 29 April 2014 and served herewith”. This is a reference to the first witness statement of Mr Kennedy, who is a partner in the Claimants’ solicitors. That witness statement is 24 pages long, and exhibit “JEK1” to it contains some 623 pages. Ms Parker suggested that this was a standard, or at least acceptable, form of pleading in a claim of this type (which began as a Part 8 claim, but which has been continued as a Part 7 claim after it became apparent that the case involved disputes of fact, in accordance with the Order of Mr Registrar Derrett dated 2 September 2014).
In paragraphs 2 and 3 of the Defence and Counterclaim, objection was taken to this form of pleading. Among other things, Mrs Alexander contended that (a) as the Claimants had elected to serve Particulars of Claim, that statement of case should be taken as setting out a concise summary of the facts and matters upon which the Claimants rely in support of their claim for the relief sought by them, (b) in the event that, by reference to Mr Kennedy’s first witness statement, the Claimants were seeking to rely on other matters, they should specify those other matters with full particularity, (c) in the meantime, as Mrs Alexander was unable to identify any such other matters, she could neither admit nor deny the same, and (d) Mrs Alexander would set out her case in answer to any wider matters upon the Claimants complying with point (b).
In my view, those objections were well founded. Ms Parker was unable to point to any provision in the Civil Procedure Rules, the notes to those Rules, or any material Practice Direction, or to cite any decided case, which supported her argument to the contrary. Nevertheless, in light of their stance that their case was properly pleaded, the Claimants took no steps to address those objections, whether by amendment of the Particulars of Claim, the provision of Further Information, or in any other way.
THE CONSEQUENCE: THE CLAIMANTS WERE SUCCESSFUL BUT DID NOT OBTAIN AN ORDER FOR COSTS
On the one hand, I accept Ms Parker’s submissions to following effect. First, the starting point is that the Claimants are the successful parties. Second, the Claimants’ case based on the construction of Article 15 had been ventilated in the correspondence. Third, there appears to be no reason to doubt that Mrs Alexander had received the letter dated 22 November 2013, the contents of which I have summarised above – although it is wrong to say that Mrs Alexander accepts this in her Defence, where what she accepts is receiving a different letter, namely that dated 22 October 2013. Fourth, Mrs Alexander nevertheless opposed the appointment of the Claimants as directors on the basis that as the majority shareholder she had the right to vote against it, alternatively on grounds of their behaviour. I also accept that, both separately and cumulatively, these factors tend to suggest that Mrs Alexander should pay the costs of this Issue.
On the other hand, I am unable to accept either (a) that the way in which the Claimants formulated and pursued their pleaded case did not lead to a serious increase in the amount of work which was required to deal with their claim or (b) that late amendment to their case did not give rise to a substantial alteration to the case which Mrs Alexander had to meet. On the contrary, in my judgment, the focus (in the Claimants’ pleaded case) on whether and to what extent Mrs Alexander had acted reasonably greatly increased the territory which had to be covered in the preparation for trial and at the trial itself, and, by the same token, the costs of both sides. It may seem hard to hold it against the Claimants that they set out to grapple with Mrs Alexander’s case on a premise that she herself had suggested, namely that she had valid grounds as a matter of fact for opposing their appointment as Directors. Nevertheless, the formulation of their pleaded case was a matter for them, and it appears to me that if they had concentrated on the construction of the Articles, then this claim should have been capable of being disposed of in accordance with the Part 8 procedure, or by way summary judgment. Ms Parker submitted in her closing arguments that the only allegations concerning conduct arose when the Claimants’ witnesses were cross-examined or when Mrs Alexander gave evidence. If and to the extent that is intended to suggest that the costs of these matters should be laid at Mrs Alexander’s door, I consider that this is entirely unreal: the Claimants had already made these issues part of their case in pleadings and witness statements; accordingly, the fact that the Claimants added nothing about them in oral evidence is beside the point. That having occurred, Mrs Alexander had to address them.
As to what else would have happened if a case based on the correct interpretation of Article 15 had been pleaded from the outset, or at least much earlier than the trial in January 2016, this appears to me to be unclear. However, the fact that Mrs Alexander indicated that she would not resist a claim that was put on that basis almost as soon as the point was raised provides grounds for thinking that, with the benefit of legal advice, she would have accepted much earlier than the trial that she should not resist this claim.
Although I consider that there has been a substantial alteration to the Claimants’ case, I am not persuaded that without a late amendment the claim would have failed, because (a) within the Claimants’ pleading is the concept that, in accordance with Article 15, they are entitled to requisition a meeting for the purpose of having themselves appointed as directors of the Company, and to be appointed as directors; and (b) by the end of the trial, all the material which was necessary to determine that case would have been deployed and considered by the court, such that I doubt that it would have been unjust to Mrs Alexander to uphold that claim if it had merit. In my judgment, the problems here are more to the effect that (a) the Claimants’ original case has resulted in the real issue being clouded and the costs being increased and (b) there is a real possibility that these matters have prejudiced Mrs Alexander, not only because they resulted in the perception that the true case against her was one to which she had a good defence but also because contesting that pleaded case caused her to run up extra costs.
In all the circumstances, including that the Claimants have succeeded on this Issue at the end of the day, I do not consider that it would be correct to make an order for costs against them. However, nor do I consider that it would be right to order Mrs Alexander to pay their costs. While she is to blame for this case having to be brought at all, and while she is the person who first raised issues concerning their conduct in this context, they are the ones who pleaded and pursued a case based on issues which greatly increased both sides’ costs of the proceedings and which, for the reasons given by Mr Carpenter-Leitch, could not and would not have been determinative of their rights. I conclude that the right order is that both sides should bear their own costs of this Issue.
REPETITIVE AND ARGUMENTATIVE WITNESS STATEMENTS: WHICH HAD NOT BEEN READ
The judge commented on the evidence of one witness (which was largely argumentative) and the fact that key phrases (and grammatical errors) had been repeated without correction in several witness statements.
In his first witness statement, Mr Shah refers to Mr Kennedy’s witness statement. Mr Shah then says (at paragraph 4) (sic): “At to the two issues namely:- (i) the 10 shares in the freehold company of which should have been allotted to Mr Minul Shah, our co-tenant in 5,Willow Court and (ii) the appointment of the four Claimants as the new additional directors to the Defendant who is also currently acts as sole director, I believe those two claims are well-founded”. By themselves, assertions like these have little, if any, evidential value, although they are capable of laying the ground for substantive evidence on issues of fact in the following text. In my judgment, however, there is no substantive evidence on the Transfer of Shares Issue in the remainder of Mr Shah’s first witness statement. Instead, what one sees (at paragraph 8) is the following:
“As to the 10 shares which I claim in the freehold company, there are, it seems to me, two issues about those shares as follows:- (i) firstly, my right to have those 10 shares in the freehold company; and, (ii) secondly, the matter for the freehold company itself to have and maintain completed records of its shareholders of which I am undoubtedly a shareholder bearing in mind that, when in November 2010 I acquired flat 5, there was also transferred to me 10 shares in the freehold company as part of the consideration paid for the purchase of flat 5.”
Moreover, the text of Mr Shah’s witness statement, including the typographical error (“At” instead of “As”), is replicated in a number of the other witness statements served on behalf of the Claimants. This repetition of the same text suggests that the witness statements do not contain the witnesses’ own evidence. The failure to correct the typographical error suggests that the witnesses have not read their statements with care. The point is particularly striking in Mr Shah’s case, because instead of referring to “me” he refers to himself as “Mr Minul Shah, our co-tenant in 5, Willow Court”.
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