WHEN A SOLICITOR MAKES A WITNESS STATEMENT: STATE THE SOURCE OF INFORMATION AND DON’T GIVE “OPINION” EVIDENCE (IT REALLY DOESN’T GO DOWN WELL)
There are numerous examples on this blog of the difficulties that can occur when a solicitor makes a witness statement on behalf of their clients. The dangers are exemplified in the judgment of Master Marsh in Folgender Holdings Ltd & Anor v Letraz Properties Ltd & Ors  EWHC 2131 (Ch)
“The CPR permits secondary evidence to be given provided that the requirements of Practice Direction 32 paragraph 18.2 are complied with. This is an important requirement. However, the maker of a statement must not only provide the usual rubric but also meticulously comply with its requirements. The court must in every instance know from what source the secondary evidence comes.”
The claimant was seeking summary judgment/ striking out defence in a case related to a loan agreement.
The Master was somewhat sceptical about the defence.
On 24 September 2018 a full defence was served on behalf of all the defendants. The defence was settled by leading and junior counsel. Neither Mr Kenny QC nor Mr Dunn-Walsh, who appeared at the hearing before me, were involved at that stage. It is not unfair to characterise the position adopted by the defendants as taking every point open to them and, in addition, points which on more mature reflection have proved to be untenable and should never have been pleaded. The defence maintains the defendants’ position that the claimants are not entitled to a second charge or, alternatively, that the charge did not extend to the profit share. They denied that the claimants were entitled to an account of net profit in relation to Hamilton Terrace or to information about the redevelopment of Chesterfield Hill. The defendants went on to say that by virtue of a promissory estoppel, the claimants are prevented from alleging a breach of the loan agreement based on a failure to provide a registrable charge. Surprisingly, the defendants put forward no pleaded case about the relief sought by the claimants. They merely denied that the claimants were entitled to the relief sought. No case was made that specific performance should not be granted in view of the intervention of a subsequent lender’s rights or because of laches or acquiescence.
THE DEFENDANTS’ EVIDENCE IN RESPONSE TO THE CLAIMANT’S APPLICATION
The Master’s scepticism was justified. At the last moment the defendant filed evidence. Many of the points made in the defence were accepted as untenable. The defendants proposed to run a defence that was neither pleaded, nor foreshadowed in the witness evidence. However it is the content of the evidence in response that we are looking at here.
An order was made on 22 May 2019 requiring Letraz to serve its evidence in reply to the application by 4pm on 7 June 2019. No evidence was served by that date and on 15 June 2019 an order was made requiring Letraz to serve its evidence by 19 June 2019, or in default it would be barred from relying on evidence in reply.
On the last possible day, a witness statement made by Marc Livingston, a solicitor with Waller Pollins Goldstein was served. Before summarising the relevant parts of his evidence, I would say something about the form of the evidence. As a general rule, it is desirable where a party faces an application for summary judgment for evidence to be given by a witness who has first-hand knowledge of the events for the obvious reason that such evidence is likely to carry greater weight than evidence based on instructions. It may, however, be convenient in some cases for evidence to be provided by the party’s solicitor based on instructions. There may also be tactical considerations in play in making a choice between the two options. Mr Livingston was chosen as the mouthpiece for the first defendant and he sets out in his statement the usual rubric saying that the facts contained in the statement are within his own knowledge unless he states otherwise and where facts are not within his knowledge he has identified his sources of information and belief. The CPR permits secondary evidence to be given provided that the requirements of Practice Direction 32 paragraph 18.2 are complied with. This is an important requirement. However, the maker of a statement must not only provide the usual rubric but also meticulously comply with its requirements. The court must in every instance know from what source the secondary evidence comes. There are, unfortunately, numerous examples in the statement of Mr Livingston making assertions of fact about matters that he could not possibly know about without stating the source of his information. He goes further and ventures opinions about the state of the property market and about the normal terms of lending. If a party chooses in response to an application for summary judgment, or indeed any application, to provide evidence through a solicitor, strict compliance with the CPR is required if that party is to avoid the risk that limited, or possibly no, weight is given to the evidence.
The point is of importance in every case. It is however of particular importance in this case because Mr Livingston’s statement has been used by the defendants to abandon their central defence based on promissory estoppel. Mr Kenny said at the hearing that, despite the defence having been settled by leading and junior counsel, the first defendant had been advised that the defence of promissory estoppel was legally unsustainable. Such candour was welcome, if surprising. It has left the first defendant’s position very unclear because Mr Livingston set out grounds to oppose the application that are not pleaded. No suggestion was made in the statement that the defence would require amendment, and no attempt to amend the defence was made until half-way through the hearing at the point at which Mr Grant was closing the claimants’ case. When the draft amended case was revealed, it transpired that the first defendant wished to rely on defences that had neither been forecast in Mr Livingston’ witness statement nor in Mr Kenny’s skeleton argument. Mr Kenny made an oral application for permission to amend the defence. I will return to that application later in this judgment.
The approach adopted by the first defendant at the hearing bore little relationship to that adopted in the defence. The first defendant accepted that the claimants were entitled to a charge and were entitled to information about the Chesterfield Hill redevelopment. As to the latter point, there is a narrow difference between the parties as to scope of the information that must be provided. The substance of the defence was based upon three points. First, that the court should not, in the exercise of its discretion, make an order for specific performance of the obligation to grant a charge. Secondly, that if an order is made, it should not have the effect of limiting the amount of the first charge to £7.5 million. Thirdly, that there was no obligation to provide a charge that was capable of being registered.
The claimant’s application was largely successful.