CIVIL PROCEDURE: BACK TO BASICS 10: CHALLENGING THE AUTHENTICITY OF DOCUMENTS MUST BE DONE PROMPTLY: COURT REFUSES LATE APPLICATION – DENTON CRITERIA APPLIED

There is a short addendum to the judgment of Lionel Persey QC (sitting as a High Court Judge) in Lloyd v Kruger [2018] EWHC 2011 (Comm). This deals with a very late application by the claimant to assert that documents were not authentic. It is a reminder of the importance CPR 32.19 and the need to scrutinise documents promptly if there are any issues in relation to authenticity.

 

“CPR 32.19(1) establishes an important principle, namely that parties are to put their cards on the table well before trial (and, in any event, within the time scale provided by CPR 32.19(2)) so that the parties and the court know, beyond question, whether the authenticity of any disclosed document is a matter in dispute… The purpose of this rule is to aid efficient case management and to ensure that there is no trial by ambush.”

THE CASE

The claimant brought an action for deceit. At the end of a six day trial, following the conclusion of the hearing, the claimant stated he wanted to challenge the authenticity of two documents. The matter returned to court for a further hearing.

THE ADDENDUM TO THE MAIN JUDGMENT

The judge prepared an addendum to the main judgment (where the claimant failed in his action) dealing with the late applicaiton.

“Introduction

    1. The trial of this action concluded on 24 April 2018. I was advised on 27 April that the Claimant wished to assert that a document that had been briefly referred to in oral closings was a fabrication. It then transpired that the Claimant intended to challenge the authenticity of two documents. I heard the Claimant’s application on 3 May 2018 and dismissed it in a ruling dated 8 May 2018. This provided as follows:-
The trial in this matter concluded on 24 April 2018. On 3 May 2018 I heard an application in which the Claimant sought to persuade me that I should reopen the case and give directions for the determination of an issue as to the authenticity of two documents
Having carefully considered the parties’ arguments I have decided not to make the order which the Claimant seeks. My reasons for this decision will be set out fully in my judgment.
Should either party wish to appeal this ruling then time to appeal will run from the date of the judgment.

The Application

    1. The application arose in the following way. During the course of his closing submissions Mr Drummond for Mr Kruger referred me to an email dated 11 May 2009 (timed at 1826) from Julian Ciecierski-Burns, a solicitor at Davenport Lyons, who were then acting for PEHL, to Mr Kruger (and copied to Nigel Davies and Alon Domb). I will refer to this as “the disputed email“. The subject heading of the email was “Company acquisition documents, schedules and bible”. The text provided
“As discussed with Nigel, I can confirm that electronic copies have been sent by email to Paul Savident. Peter Teale, Denis Lloyd all the directors and shareholders.
I have discussed this with Nigel, but he has not seen the final version.
Can you please confirm that this is acceptable? …”
    1. I was advised that this email had been disclosed to the Claimant in December 2017 (ie at least 5 months before trial). The email had not been put to Mr Lloyd in evidence or previously referred to in terms at the hearing. It did, however, form part of the trial bundles. Ms Bayliss objected to the fact that it had been referred to in closing and asked me to exclude it from the evidence. I decided to direct the parties to investigate whether an email was in fact sent to Mr Lloyd and what attachments, if any, were sent with it. I observed in discussion with Ms Bayliss that even if the documents and schedules had been sent to, but not read by, Mr Lloyd, she would still be able to make the point that because the claim was in deceit it would not be a defence for the Defendant to contend that he should have read them.
    2. On Day 4 of the trial disclosure of certain documents from the files of the by now defunct Davenport Lyons was given. I was not referred to any of these during the hearing. Following the conclusion of the trial the Claimant’s legal team discovered another email dated 11 May 2009 (also timed at 1826) from Mr Ciecierski-Burns to Mr Kruger (and copied to Nigel Davies and Alon Domb). The text provided that:-
“As discussed with Nigel, I now attach a revised personal guarantee in relation to our fees, which now includes the two fee-caps as agreed.
I have discussed this with Nigel, but he has not seen the final version.
Can you please confirm that this is acceptable? …”
    1. The Claimant contends that Mr Kruger deleted the words underlined in the second of the two emails to which I have referred and replaced them with the words underlined in the first.
    2. The Claimant also challenged the authenticity of a second document (“the TKO letter“). This was a TKO disclosure letter that purportedly formed part of the bible of documents at the closing of the deal. It was asserted that there was cogent evidence that it was a later fabrication because the copy had a heavy black line on the left hand side of the page, Mr Kruger Sr’s signature did not look like any other signature of his in the bundle, and the letterhead was anomalous.
    3. The Claimant invited me to give directions for the recalling of the parties and to list the matter for a further hearing, with cross-examination. It was submitted that there were already serious question marks over Mr Kruger’s dishonesty and that it was important in the context of the case for me to make a determination in relation to the disputed email.
    4. The Defendant, who was very ably represented on this application by his solicitor, Mr Richard Slade, invited me to dismiss the application. It took Mr Slade only minutes to demonstrate that the challenge to the authenticity of the TKO letter was entirely without foundation. Miss Bayliss did not then pursue her application in respect of the TKO letter. It should never have been made.

Applicable principles

    1. CPR 32.19 provides
“… (1) A party shall be deemed to admit the authenticity of a document disclosed to him under Part 31 (disclosure and inspection of documents) unless he serves notice that he wishes the document to be proved at trial
(2) A notice to prove a document must be served:-
(a) by the latest date for serving witness statements; or
(b) within 7 days of disclosure of the document, whichever is later …”
    1. CPR 32.19(1) establishes an important principle, namely that parties are to put their cards on the table well before trial (and, in any event, within the time scale provided by CPR 32.19(2)) so that the parties and the court know, beyond question, whether the authenticity of any disclosed document is a matter in dispute: McGann v Bisping [2017] EWHC 2951 (Comm), per Richard Salter QC sitting as a judge of the High Court. The purpose of this rule is to aid efficient case management and to ensure that there is no trial by ambush.

Discussion

    1. CPR 31.19 was not complied with and the Claimant is therefore deemed to have admitted the authenticity of the disputed email. It is not, however, disputed that I have a power to relieve the Claimant of the consequences of its failure to give a proper notice.
    2. The implications of the disputed email (that he received the deal documentation including schedules) were inconsistent with Mr Lloyd’s case and his evidence. Ms Bayliss acknowledged this. She said that no one had focussed upon the disputed email at the time that it had been disclosed because so much documentation had been produced. I do not find this to be a satisfactory explanation. Mr Lloyd and the Claimant’s legal team have shown an admirable command of the documentation and, I am sure, would have rapidly and carefully considered all disclosure as soon as it was produced. They had certainly done so by the time that Mr Lloyd’s witness statement came to be prepared. The Claimant could have required the Defendant to prove the disputed email but did not.
    3. In deciding whether I should accede to the application it is appropriate to keep in mind the principles laid down in Mitchell v News Group Newspapers Ltd [2014] 1 WLR 796 (CA) and Denton v TH White [2014] 1 WLR 3926 (CA). A judge should address an application for relief from sanctions in three stages: (i) identify and assess the seriousness and significance of the failure to comply with any rule, practice direction or court order; (ii) consider why the default occurred; (iii) evaluate all the circumstances of the case, so as to enable the court to deal justly with the application.
    4. As to the first stage, I consider that the failure to comply with CPR 32.19 in the context of a case in which the Claimant was already alleging a raft of deceitful misrepresentations against the Defendant is relatively serious. In the context of a case like this it was incumbent upon the Claimant to raise any challenges to the Defendant’s disclosure at the appropriate time.
    5. As to the second stage, no sensible explanation has been put before me as to why no challenge was made. The Claimant makes the point that he was not aware that a solid challenge could be made until it had received and considered the second email of 11 May 2009. There is some force in this, but the point on its own does not justify my giving leave to reopen the trial.
    6. I turn next to consider the circumstances of this case, giving particular weight to the need for litigation to be conducted efficiently and at proportionate cost, as well as to enforce compliance with the rules.
(1) The first, and important, point is that the trial had concluded by the time that the application was made.
(2) Secondly, I am not convinced that matters upon which the Claimant relies are strong evidence that an email was forged, or that it was forged by Mr Kruger. It does not seem to me to be implausible that a solicitor could use one, very short, email as the inelegant boilerplate for another short email and fire them both off within the same minute. The differences between the emails raise question marks, but no more.
(3) Thirdly, I was surprised and not a little concerned when Ms Bayliss sought to persuade me that the forgery issue could be resolved by cross-examination of the parties alone. She was resistant to the suggestion that forensic expert evidence would be needed or even appropriate and reluctant to accept that it would be necessary to seek further disclosure from Davenport Lyons’ successors, Gordon Dadds (who were only prepared to submit to court orders requiring disclosure), or evidence from Mr Ciecierski-Burns. In my judgment any proper investigation of the authenticity of the document would necessarily involve obtaining evidence from all of these sources.
(4) Fourthly, it would be inimical to the efficient conduct of this matter to permit the case to go off for potentially a substantial period for a further one to two day hearing. I consider that to do so would be contrary to the overriding objective of dealing with cases justly and at proportionate cost. I do not think that this would be either a good, or an appropriate, use of court time.
(5) Finally, I was also satisfied that the determination of this issue would not assist me in determining whether the Claimant’s action in deceit should succeed. Mr Slade correctly observed that only I would be in a position to know whether any issue to be determined would involve reliance on the Defendants’ uncorroborated evidence.
  1. I decided to dismiss the application for the reasons given above.”