NEW EVIDENCE ALLOWED AFTER HEARING: A HIGH COURT DECISION

In Swift Advances PLc -v- Ahmed [2015] EWHC 3265 (Ch) Mr Justice Norris permitted new evidence to be adduced after evidence and submissions had been completed.

“..it may be expected that courts will allow fresh evidence when to refuse it would affront common sense, or a sense of justice.”

“It is the duty of every litigant not to mislead the Court or his opponent. He will obviously mislead the Court if he gives evidence which he knows to be untrue. But he will also do so if, having led the Court to believe a fact to be true, he fails to correct it when he discovers it to be false. This duty continues…until the judge has given judgment.”

KEY POINTS

• It was appropriate in this case for the court to allow new documentary evidence to be adduced after evidence and submissions had been completed.
• These were documents that should have been disclosed by the defendant.
• They were relevant to the issues in question.
• The defendants had given incorrect answers

THE CASE

The claimant was seeking possession proceedings in two properties. The first defendant had borrowed money using these properties as security. However the first defendant’s case was that he was not, in fact, the owner of the property but that various deeds had transferred the properties to his wife.

The claimant sought an order setting aside the two deeds. At the trial the first defendant gave evidence that he bought one of the properties in his own name.

(An order requiring disclosure of the conveyancing files of the properties was not complied with).

A review by the claimant, the day after submissions had been completed, showed that the property had been purchased in joint names and transferred to the first defendant alone in 2006.

The claimant sent this information to the judge and a further hearing was held.

THE JUDGMENT ON THIS ISSUE

1. I held a further hearing. At that hearing:-

a) Ms Hayes submitted that although she could not say that the document had only come into the possession of Swift after the close of evidence it was the case that it was only Mr Ahmed’s inability to explain in cross examination the disparity between the register and his evidence that he bought High Elm in his own name in 1995 that prompted further investigation;

b) Ms Hayes argued that 2006 Transfer ought to have been disclosed in any event;

c) Ms Hayes submitted that the matter was one for the discretion of the Court and although the evidence had closed it was possible to re-open the case without prejudice to Mr and Mrs Ahmed because they could if they wished offer themselves for cross-examination (though that was not a course she herself wished to be taken);

d) Ms Feng argued that evidence in the case had closed without Swift relying on a document which it acknowledges it had in its possession and that I should decide the case on the evidence led at trial;

e) Ms Feng observed that the 1996 Deed (which for the purposes of this application is accepted as authentic) treated Mr Ahmed as the sole owner of High Elm and able to settle it on Mrs Ahmed so that the puzzle of the state of the register of title was apparent from December 2014 when the 1996 Deed was first mentioned;

f) Ms Feng informed me that her instructions were that Mr and Mrs Ahmed did not wish to attend to be cross-examined on the 2006 Transfer (but I directed that they should at least have the opportunity to proffer in a witness statement any explanation for the oversight in not mentioning the 2006 Transfer in their written or oral evidence, in case I decided to admit it).

1. I shall admit the 2006 Transfer as evidence in the case. The principle that there must be finality in litigation must of course weigh heavily. But at the time the 2006 Transfer was sought to be introduced I had not made my assessment of the evidence and the trial had not concluded. As Lord Wilberforce said in Mulholland v Mitchell [1971] AC 666 (in the context of admitting evidence after the trial had concluded, which is a stronger case than this) at 679-680:-

“..it may be expected that courts will allow fresh evidence when to refuse it would affront common sense, or a sense of justice.”

In my judgment it would be an affront to common sense and to any sense of justice to exclude from consideration the 2006 Transfer.

1. Further, I do not consider that Mr Ahmed or Mrs Ahmed can properly object to its being adduced. Their evidence was that the 2006 Deed was a simply an updating of the 1996 Deed to include extra property. That evidence is liable to mislead, because the 2006 Deed was in truth a reinstatement of the 1996 Deed (which had in effect been set aside by the terms of the 2006 Transfer that reconveyed to Mr Ahmed whatever beneficial interest Mrs Ahmed acquired under the 1996 Deed). As Stuart-Smith LJ said in Vernon v Bosley (No.2) [1999] QB 18 at 37D:-

“It is the duty of every litigant not to mislead the Court or his opponent. He will obviously mislead the Court if he gives evidence which he knows to be untrue. But he will also do so if, having led the Court to believe a fact to be true, he fails to correct it when he discovers it to be false. This duty continues…until the judge has given judgment.”

1. I can fairly admit the 2006 Transfer because Mr Ahmed and Mrs Ahmed have been afforded the chance to put in further witness statements (which opportunity they have taken) and have declined to be cross-examined further.

2. Having admitted the 2006 Transfer in evidence I find and hold it to be an authentic document and (having been registered) effective according to its terms. It is therefore unnecessary to consider the 1996 Deed at all in relation to High Elm, since whatever the effect of that document it was entirely undone as regards High Elm by the 2006 Transfer.

3. It is common ground that the 2006 Deed was a transaction at an undervalue for the purposes of s.423. The sole question is therefore whether Swift has established on the balance of probabilities that a real and substantial purpose of Mr Ahmed in entering the 2006 Deed was to place assets beyond the reach of (or otherwise prejudice the interests of) those who might have a claim upon him. In this connection the authorities make clear that Swift does not have to demonstrate that Mr Ahmed had it in mind: Fortress Value Recovery Fund v Blue Skye [2013] EWHC 14 (Comm).

4. In my judgment Swift has discharged that burden.