THE DANGERS OF A LAWYER GIVING EVIDENCE: A “SOMEWHAT STRANGLED VERSION” OF THE SOURCE OF INFORMATION & BELIEF: SUMMARY JUDGMENT APPLICATION DISMISSED BECAUSE OF PAUCITY OF FIRST-HAND EVIDENCE

There are numerous posts on the blog about the need for first-hand evidence to be given, and the dangers of a lawyer making witness statements.  These risks are exemplified in the judgment of Chief Master Marsh today in The David Roberts Art Foundation Ltd v Riedweg [2019] EWHC 1358 (Ch) (06 June 2019).

“It need hardly be said that careful compliance with paragraph 18.2 of Practice Direction 32 is always essential and particularly where an application is made for summary judgment. Where a party is seeking to persuade the court to enter judgment on the claim or an issue it is always preferable for evidence to be provided by a witness who has first-hand knowledge of the events.”

THE CASE

The claimant was seeking summary judgment to complete the sale of land. The grounds of opposition were that, as a charity, the claimant had failed to comply with the necessary procedural requirements prior to sale.

THE MASTER’S COMMENTS ON THE  CLAIMANT’S EVIDENCE

The Chief Master held that relief from sanctions was not needed to serve a late witness statement. However that witness statement was from the solicitor and not from anyone with first hand knowledge of the facts. Further there was a “strangled version” of the requirement to give the source of information and belief

  1. The claimant’s evidence was provided in a statement by David Payton dated 20 December 2018. He is a partner at Dentons UK & Middle East LLP. (Dentons replaced Simkins LLP who acted for the claimant in the transaction and up to the service of the defence and counterclaim). The defendant chose not to serve any evidence in response to Mr Payton’s statement. On receipt of the skeleton argument prepared by Mr Meuli, the claimant considered that it was necessary to provide additional evidence to meet what are said to be new factual assertions made by the defendant, albeit they are only made in a skeleton argument. A further statement of Mr Payton was served on 19 March 2019.
  2. The defendant objected to the statement being relied on by the claimant. During the course of the hearing, having heard submissions from Ms Barton for the claimant and Mr Meuli I admitted the further statement. I did so on the basis that the claimant was taken by surprise by new matters raised in Mr Meuli’s skeleton argument and it was right that the claimant should have the opportunity to place further evidence to the court. Furthermore, in reality, the additional statement provided only limited new evidence and therefore the possibility of prejudice to the defendant was slight. Mr Meuli did not apply to adjourn the hearing and I am satisfied that there was no material prejudice to the defendant.
  3. In the course of submissions concerning whether the statement should be admitted, Mr Meuli submitted that the claimant needed to obtain relief from sanctions. I do not accept that is right and it is unhelpful for the Mitchell and Denton jurisprudence to be relied on in such circumstances. There was no sanction attached to the Deputy Master’s order and it cannot be said that the claimant failed to comply with it or any provision of the CPR. The claimant was not seeking an extension of time. The application was dealt with on the straightforward basis that it was the defendant who was seeking to introduce new material well beyond the time permitted for doing so and, in those circumstances, it was plainly right, in the interests of justice, that the claimant should have an opportunity to deal with it.
  4. Some reliance is placed on the fact that Mr Payton has no first-hand knowledge of the relevant events and can only provide evidence on the basis of information provided to him by others. His statement contains a somewhat strangled version of the common formulation dealing with knowledge where he says that the evidence is provided from his “…own knowledge and belief, including documentation, save where I indicate otherwise, where I indicate the source of that knowledge.” However, there are a number of occasions where he does not explain the source of material evidence. However, in his second statement, Mr Payton says that his evidence is based on the documents he exhibited to his first statement and from instructions provided to him by Mr Anthony Quayle who is a director of the claimant.
  5. It need hardly be said that careful compliance with paragraph 18.2 of Practice Direction 32 is always essential and particularly where an application is made for summary judgment. Where a party is seeking to persuade the court to enter judgment on the claim or an issue it is always preferable for evidence to be provided by a witness who has first-hand knowledge of the events.

THE RESULT – CLAIMANT’S APPLICATION FAILED

The paucity of direct evidence on key points was one of the reasons the claimant’s application for summary judgment failed.
    1. I have already made observations about the claimant’s evidence and noted that the absence of evidence from one of the trustees is not fatal. However, in my judgment it falls some way short of being sufficient to discharge the burden that lies on the claimant on an application for summary judgment because:
(1) There is no evidence about the trustees’ initial decision to put the property on the market and there is no evidence about what instructions were given to the agents or their advice.
(2) There is no evidence about why the proposed disposition was not advertised.
(3) There is only minimal evidence about the steps that were taken to market the property and how thorough the exercise was.
(4) There is no evidence that the absence of advertising made no difference to the sale terms. The court is invited to infer that this is so, but this is not satisfactory. It would have been open to the claimant to have obtained evidence on this point from Cushman & Wakefield. Indeed, it is a matter they should have considered in their report. Instead they incorrectly record that the property had been marketed for 3- 4 months.
(5) The claimant’s evidence about compliance with section 119(1)(c) is inadequate. Mr Payton’s evidence is that it is obvious that the directors were satisfied on this point because the price that was offered was considerably above Cushman & Wakefield’s valuation figure. What is missing, however, is evidence from at least one director saying in terms what it was they considered and what was their reasoning that led them to be satisfied with the offer.
(6) The minutes of the meeting are unsatisfactory not least because they only refer to the supplemental report being considered and they do not record that the directors were satisfied that the terms were the best that could reasonably be obtained for the claimant.
Conclusion
  1. This is not a suitable case for summary judgment. There needs to be an investigation at a trial about the process of marketing the property and the decision making process of the directors. Disclosure will be required. In those circumstances, I will dismiss the claimant’s application and consider giving directions for trial, as well as dealing with consequential issues, when this judgment is handed down.