FOOTBALL CLUB’S APPLICATION DOES NOT GET EXTRA TIME: APPLICATION FOR RELIEF FROM SANCTIONS IN ORDER TO DISPUTE AUTHENTICITY OF DOCUMENTS IS REFUSED
In UTB LLC v Sheffield United Ltd  EWHC 1377 (Ch) Mr Justice Fancourt refused Sheffield United’s application for relief from sanctions so as to allow it to dispute the authenticity of documents during the course of a trial.
“A challenge to the authenticity of transactional documents, in circumstances of suspicion of a forgery, is a challenge that must be raised in good time ahead of a trial, so that all parties affected have the opportunity to give further disclosure and adduce relevant evidence on the question”.
On the 9th day of a trial the defendant (Sbeffield United) indicated that it wanted to dispute the signature on some documents. The rules state that a party must give notice that they are disputing the authenticity of a document at an early stage:
CPR 32.9 states:-
(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.”
THE APPLICATION FOR RELIEF FROM SANCTIONS IN THE CURRENT CASE
The judge held that the Denton principles applied to the application for permission to dispute the authenticity of the document.
Against those conclusions about the relevance and significance of the validity of execution of the share sale agreements, I must consider whether or not it is appropriate to grant relief against sanctions. It is common ground that the approach inDenton v T.H. White Ltd  EWCA Civ 906;  1 WLR 3296 should be applied, namely to consider the seriousness and significance of the default, any explanation given for it and whether in all the circumstances of the case it would be in accordance with the overriding objective and just to grant relief.
Mr Downes concedes that the failure timeously to give notice disputing the authenticity of the documents in question was not a trivial breach. Notice should have been given by 13 February 2019 at the latest, about 3 months before the start of the trial. In fact, SUL’s solicitors first raised the matter on the Saturday after I had spent two days pre-reading, immediately before the oral openings of the parties’ cases. No satisfactory explanation of why it took so long to raise the issue has been given. The explanation of the circumstances in which the discrepancy was noticed is not itself a satisfactory explanation for the failure to raise the issue earlier.
In my judgment, the breach was a serious breach. A challenge to the authenticity of transactional documents, in circumstances of suspicion of a forgery, is a challenge that must be raised in good time ahead of a trial, so that all parties affected have the opportunity to give further disclosure and adduce relevant evidence on the question. If, as SUL now contends, the validity of the two share sale agreements is a matter of significance for its case, it should have investigated these matters at a much earlier time. Instead, the matters were first raised once the trial had started (with pre-reading) and as a result were not drawn to my attention until day eight of the trial. The significance of the breach in that context is self-evident. If relief against sanctions were granted, UTB would now have to carry out further investigations, disclose documents, in all probability prepare further witness statements, call oral evidence and possibly instruct a handwriting expert and call that witness to give evidence. If the issue were not (as I perceive it to be) a purely collateral issue, SUL would need to amend its pleaded case to raise the new allegations.
Although my consideration of this issue coincides with a week’s vacation and therefore a pause in the hearing, this is a complex and expedited trial with a tight timetable. These new matters will be a wholly unwelcome distraction, at least so far as UTB is concerned, in the course of further preparation for the resumption of the trial and the arguments that will have to be addressed in detail at the end of it. It is of paramount importance that litigation is conducted efficiently and at proportionate cost and in compliance with the rules and practice directions of the CPR. Conducting an investigation into the alleged forgery of one or more agreements will inevitably disrupt the smooth running of the trial, interfere with the parties’ preparation and lead to considerable further expense being incurred.
Given that the issues raised are entirely collateral, as I have explained, it would be a wrong exercise of my discretion to grant relief now in order to permit these issues to be raised, so late in the day. It is not unfair to either party’s case, as pleaded and then refined and explained in the course of opening submissions, to proceed on the assumption that the two agreements are validly executed. It makes no difference to SUL’s case on unsuccessful avoidance of clause 9.1.12 or on conspiracy to injure whether the agreements were validly executed or not. It would be unfair to UTB to require it to deploy resources now, in the middle of a trial of numerous other complex factual and legal issues, to address allegations of forgery.
For the reasons that I have given, I therefore refuse to grant relief against sanctions to enable SUL to challenge the authenticity of the documents that have been disclosed and to call expert handwriting evidence.