GIVING THE SOURCE OF INFORMATION AND BELIEF IN A WITNESS STATEMENT: NOT A MERE TECHNICALITY: FAILURE TO COMPLY WITH RULES CAN HAVE MAJOR CONSEQUENCES

This blog has dealt, many times, with the difficulties  that  can arise when a solicitor makes a witness statement in support of an interlocutory application.  Not least there is a duty to give details of the source of information and belief.  Those difficulties are fully illustrated by the judgment of  Chief Master Marsh in Punjab National Bank (International) Ltd v Techtrek India Ltd & Ors [2020] EWHC 539 (Ch)

“In my judgment, where the maker of a statement is relying on evidence provided by a witness who is an officer of, or employed by, an incorporated body, the requirements of paragraph 18 of Practice Direction 32 to provide the source of evidence is not complied with merely by saying that the source is the entity or officers of the entity. If the source of evidence is a person, as opposed the source being documents, the person or persons must be identified and named. A corporate entity cannot experience events and can only operate through the medium of real persons. It follows that the source of evidence must be a named person or persons. A failure to identify the source in a manner that complies with paragraph 18.2 will mean the court has to consider whether to place any weight on the evidence, especially where it touches on a central issue.”

THE CASE

The claimant was seeking summary judgment where it was said the third defendant had signed a guarantee.

THE MASTER’S COMMENTS ON THE WITNESS EVIDENCE IN SUPPORT

The Master considered the evidence that the claimant has filed in support of the application.

13. The claimant also relies on its particulars of claim and four witness statements made by:

(1) Mr Randeep Jandu a solicitor with Stradbrooks Solicitors.

(2) Mr Pramod Kumar an Assistant Manager with the claimant.

(3) Mr Muddor Nayak who was until he retired in May 2019 an Executive Director of the claimant.

(4) Mr Andrea Angelillis a lawyer with Studio Legale Bird & Bird in Milan.

1. 1. Mr Jandu deals with the claimant’s application for summary judgment against the second third and fourth defendants. His evidence is largely formal. Paragraph 2 contains the type of rubric that is common. He says:

” I make this statement from matters within my own knowledge and from information that has been provided to me by officers of the Claimant and from a perusal of the documents in the Claimant’s files and from other information that has come to me in the course of acting as the Claimant’s solicitor. Matters within my own knowledge are true and all other matters are true to the best of my knowledge and belief.”

1. The general rule about the evidence of witnesses is contained in CPR rule 32.2(1) to the effect that any fact which needs to be proved by the evidence of witnesses is to be proved, at any hearing a trial, “by their evidence in writing”. Under CPR rule 32.2(2) the general rule is subject to any provision to the contrary contained in the CPR or elsewhere and to an order of the court.

2. CPR rule 32.6(1) provides a general rule that “… at hearings other than the trial evidence is to be by witness statement, unless the court, a practice direction or any other enactment requires otherwise.” Hearsay evidence is generally admissible in civil proceedings by virtue of the Civil Evidence Act.

3. CPR rule 32.8 specifies that a witness statement must comply with the requirements set out in Practice Direction 32 and paragraph 18 of that practice direction sets out provisions specifying what must be contained in the body of a witness statement. Paragraph 18.2 requires that the witness statement contains a statement indicating which of the statements are made from the witness’s own knowledge and which are matters of information and belief. In addition, the witness statement must indicate “… the source for any matters of information or belief.” The rule does not say whether the “source” of evidence in the case of a corporate entity must be identified by referring to a person or persons, or whether, as here, it suffices to identify “officers of the Claimant”.

4. CPR rule 32.4(1) describes a witness statement as “a written statement signed by a person which contains the evidence which that person would be allowed to give orally. Whether the witness statement is intended for use at a trial or another hearing the form of the statement is the same and the requirements of CPR rule 32.8 and the Practice Direction must be complied with. It is important, however, that the maker of the witness statement makes it clear when the statement contains hearsay evidence and in doing so complies with the requirement to specify the source. As Patten J pointed out in Clarke v Marlborough Fine Art Ltd [2002] 1 WLR 1731 at [37] the failure to identify the source of hearsay evidence does not render the hearsay evidence inadmissible but it goes to the weight the court will give to that evidence.

5. As a general observation, it is a matter of considerable convenience that a legal representative is able to provide hearsay evidence for hearings, other than trials, based on instructions. One reason for this is that it is more economical for evidence to be gathered together in one place, rather than the court being provided with a series of witness statements from those who can give first-hand evidence. Another factor that will be in the minds of legal advisors is that hearsay evidence provided by a solicitor prevents the person who has knowledge of the relevant events being subjected to cross-examination at the trial on the content of a witness statement made at an early stage of the claim and before disclosure has taken place. The corollary, however, is that the requirements of paragraph 18 of Practice Direction 32 must be carefully complied with if the statement is to be given full weight. Where the applicant seeks summary judgment this is of particular importance.

6. In my judgment, where the maker of a statement is relying on evidence provided by a witness who is an officer of, or employed by, an incorporated body, the requirements of paragraph 18 of Practice Direction 32 to provide the source of evidence is not complied with merely by saying that the source is the entity or officers of the entity. If the source of evidence is a person, as opposed the source being documents, the person or persons must be identified and named. A corporate entity cannot experience events and can only operate through the medium of real persons. It follows that the source of evidence must be a named person or persons. A failure to identify the source in a manner that complies with paragraph 18.2 will mean the court has to consider whether to place any weight on the evidence, especially where it touches on a central issue.

7. CPR rule 32.6(2) provides an exception to this general principle and permits a party to rely on matters set out in a statement of case or the application if it is verified by a statement of truth. Under CPR rule 22.1(6) the statement of truth in a statement of case may be signed by a legal representative on behalf of the party. It is nevertheless the party’s statement of truth. But there is nothing in CPR rule 22(1) that requires the legal representative when signing a statement of truth on behalf of an incorporated party to identify the source of instructions from which authority to sign came.

8. The particulars of claim assert that the guarantee was signed by the third defendant on 12 December 2013. Mr Jandu’s witness statement says it was “given” on that date. The witness statement goes on to say that had the guarantees of first, second and third defendants not been given the claimant would not have continued the facilities. No evidence is provided on behalf of the claimant about the circumstances in which the third defendant signed the Guarantee (so far as they are known) and why the document was not completed or signed by the claimant.

FURTHER OBSERVATIONS ON THE CLAIMANT’S EVIDENCE

The Master had further criticisms of the claimant’s evidence.

(1) The third defendant’s position about signing the guarantee appears to have hardened over time. In a witness statement dated 21 February 2018, made in relation to a dispute about jurisdiction, he said:

“8. I cannot remember this supposed signing [signing the guarantee] at all. I highlight this is not to call into question the original signature actually being made by me, but to draw attention to the lack of due process with which this document was signed, witnessed etc. There was no formal meeting between the bank and myself.”

By the time he served his defence in June 2018, he put the claimant to strict proof that he had signed the guarantee.

(2) It is nevertheless surprising that when the claimant came to prepare its evidence for the Part 24 application over a year later (the application was issued on 26 August 2019) no evidence was provided about the circumstances in which the guarantee came to be signed in what is, on any view, a very unsatisfactory form. The bank was aware the third defendant said he did not recall signing it, required to see the original and did not accept the document he may have signed was necessarily in the form in which it is now produced. The claimant has not said where the guarantee was signed (for example whether it was done in this country or in the presence of bank officials) or why it is incomplete. Nothing has been said about whether the form of the guarantee was agreed with Techtrek.

CLAIMANT’S APPLICATION FOR SUMMARY JUDGMENT FAILED

The lack of clear evidence from the claimant contributed to the application for summary judgment being dismissed.

1. 1. I am satisfied that most of the grounds of defence relied on by the third defendant do not have a real prospect of success. In summary:

(1) He is unable to rely on the delay in signing the guarantee. The 2013 Facility did not make time of the essence and, in any event, a failure to require him to sign the guarantee within the period of one month has no effect on the validity of the guarantee signed outside this period. The time limit for providing the guarantee was of course a provision for the benefit of the claimant, not the defendant.

(2) There was adequate consideration. Both experts agree on this point.

(3) No defence arises from the statements alleged to have been made to the third defendant in March 2013.

(4) The form of the guarantee complies with Indian law. If it was signed by the third defendant, He is not in a position to rely on the failure of the claimant to sign it.

(5) The guarantee is valid as a unilateral contract containing promises to the claimant.

(6) The absence of advice from a legal adviser and him not being given a copy of the document do not provide defences.

(7) There is nothing arising from the reports of the experts that provides a defence under the law of India.

1. 1. I am, however, not satisfied that the claimant has discharged the burden of proof in relation to two matters.

(1) The claimant’s evidence of the third defendant signing the document that was produced at the hearing is inadequate. The court may have regard to the particulars of claim, which provide some limited support for the claimant’s case, but taken together with Mr Jandu’s witness statement it does not suffice to discharge the evidential burden. I can only give very limited weight to Mr Jandu’s evidence without the sources of his knowledge being provided and in the absence (a) any explanation of the circumstances in which the third defendant is said to have signed to guarantee, (b) confirmation of when and where he signed it (if known) and (c) that the document now relied on is the guarantee he signed. The need for this evidence is heightened by the unsatisfactory form in which the Guarantee was produced.

(2) The claimant has not established that the form of the Guarantee was agreed by Techtrek. There is not evidence at all on this point. The fact that the third defendant was a director of Techtrek does not suffice. Some communication between the claimant and Techtrek on the subject of the Guarantee would have to be produced.

1. I have considered whether to postpone handing down judgment and inviting the claimant to provide further evidence. However, such a course of action would be exceptional. It is not for the court to invite the claimant to improve on the case it put forward. These are not mere matters of form or points that might have taken the claimant by surprise. The third defendant put the claimant to proof of due execution of the Guarantee in his defence. The claimant had an ample opportunity to prepare its evidence for the application for summary judgment that was issued a year after the defence was served.
2. Finally, although it is not a matter that directly affects the outcome of this application, it is unfortunate that the claimant did not make the original Guarantee available to the third defendant long before the hearing of the application for summary judgment.
3. I will dismiss the application.