WHEN SHOULD A SOLICITOR MAKE A WITNESS STATEMENT ON BEHALF OF THEIR CLIENTS? A REVIEW OF THE CASES

Last week I gave an in-house talk to a London firm of solicitors.*  One of the matters we discussed was when (if ever) it was appropriate for a solicitor to make a witness statement in support of an interlocutory application.   One result, I was told afterwards, was that the firm is having a major change in practice.  It is worthwhile reviewing some of the cases where the fact that it was a solicitor who had made a witness statement caused difficulties for their own clients (and presumably this led to difficulties for the solicitors themselves).

 

“The affidavit sworn by the Defendants’ solicitor in this case is, in my judgment, the paradigm of an affidavit that should have been sworn by a party personally.”

THE CLIENT SHOULD HAVE SWORN THE AFFIDAVIT: BRACKEN PARTNERS

This issue was considered by Stanley Burnton J in Bracken Partners -v- Gutteridge [2001] EWHC 568 (Ch)

THE CASE

The judge was considering an application to vary a freezing injunction.  Many of the facts were contentious. The judge made only minor amendments to the original injunction.

THE JUDGE’S COMMENTS ON THE WITNESS EVIDENCE

Affidavits by solicitors

  1. In this case both parties’ evidence has been in the form of affidavits sworn by their solicitors, setting out facts on the basis of information provided by others. Where affidavit evidence is required urgently the provision of evidence in this way may be necessary for practical reasons.
  2. Where the evidence given by affidavit takes the form of the exhibiting of documents and comment on them, or where the facts are uncontentious, there is no possible objection to a solicitor’s affidavit. Where, however, on an application for the grant or continuation or the discharge of a freezing injunction the facts are contentious, and evidence is to be given on the matters that are within the personal knowledge of a party to the proceedings, he or she should swear the affidavit.
  3. The affidavit sworn by the Defendants’ solicitor in this case is, in my judgment, the paradigm of an affidavit that should have been sworn by a party personally. It is largely an affidavit of facts deposed to on the instructions of Mr Gutteridge, setting out his case and his recollection. Much of it is highly contentious.
  4. I do not make these comments by way of criticism of the Defendants’ solicitors or counsel. I am aware that it is common practice for solicitors to make the affidavits in cases such as the present. My decision in this case is unaffected by the fact that Mr Gutteridge did not swear the affidavit personally. However, in circumstances such as those of the present case, the correct practice is for the affidavit to be sworn by the defendant personally and not by his solicitor. In other cases the Court may take into account the unexplained reluctance of a party to swear such an affidavit.

 

FOLGENDER HOLDINGS:  A PERSON WITH FIRST HAND KNOWLEDGE OF THE EVENTS SHOULD MAKE THE STATEMENT

The dangers are exemplified in the judgment of Master Marsh in Folgender Holdings Ltd & Anor v Letraz Properties Ltd & Ors [2019] EWHC 2131 (Ch)

THE CASE

The claimant was seeking summary judgment/ striking out defence in a case related to a loan agreement.

THE DEFENCE

The Master was somewhat sceptical about the defence.

  1. 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.

  1. 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.
  2. 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.
  3. 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.
  4. 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 RESULT

The claimant’s application was largely successful.

 

BAYTON WILLIAMS -v- BAYTON WILLIAMS

The claimant’s solicitor signed a witness statement stating “As far as I am aware, the Defendant has not filed any written evidence with the Court nor has he served any evidence on the Claimant.”   The Master held that “The clear implication of the expression “As far as I am aware” was, in my judgment, that the file had been checked by him or someone in his firm.”

THE SOURCE OF INFORMATION AND BELIEF

We do not have the full witness statement made, nor do we know what was said about how the solicitor had the information to state “as far as I am aware”.  Many witness statements, particularly by lawyers, give the source of information and belief as “my general knowledge of the file and dealing with the matter”.   In many cases this may suffice. However the solicitor here was stating that “as far as he was aware” a document had not been filed.  If some consideration had been given to the need to give the source of information and belief the solicitor may well have considered it prudent to check what had, in fact, been filed by the defendant.

The failure to do so led the Master to comment ” I accept that he had no conscious intention to misled the court. However, it is clear from his evidence that he knew both that the file could have been checked, and that neither he nor anyone else at his firm had done so. This shows a failure properly to consider both the effect of the statement, and the need to have a sound evidential basis for making it, with the inevitable consequence that the court was in fact misled. ”

 

AFIA -V- MELLOR

One of the prime examples that can be found is the judgment of Recorder Monty QC in   Afia v Mellor & Anor [2013] EW Misc 23 (CC). The only witness called for the defendants was their solicitor.  Once again things did not go well..

THE CASE

The claimant brought an action based on a guarantee. The claimant gave evidence and was found to be wholly credible. The defendants did not give evidence. However their solicitor did.

 

THE JUDGMENT ON THE EVIDENCE CALLED ON BEHALF OF THE DEFENDANTS

    1. Neither of the Defendants gave evidence. I heard evidence in support of their defence of this claim from Mr Philip Cohen. Mr Cohen is the senior partner of Jeffrey Green Russell (“JGR”), a firm of solicitors which acted for the Defendants throughout the relevant period and has acted for the Defendants in this litigation.
    2. I was extremely troubled by Mr Cohen’s evidence from the outset. After some prevarication, which in my view was not fitting for a solicitor of Mr Cohen’s experience, he accepted that he had not considered the SRA’s Code of Conduct at any stage when acting for the Defendants, providing his several witness statements, and giving oral evidence at trial.
    3. The Code is based on a number of Principles which define the fundamental ethical and professional standards expected of a solicitor when providing legal services. The Principles include upholding the rule of law and the proper administration of justice; acting with integrity; not allowing the solicitor’s independence to be compromised; and behaving in a way that maintains the trust placed in the solicitor and in the provision of legal services. The Code sets out certain Outcomes, which are mandatory, supplemented by Indicative Behaviours, which specify, but do not constitute an exhaustive list of, the kind of behaviour which may establish compliance with, or contravention of the Principles. These Indicative Behaviours are not mandatory but (in the words of the SRA’s Code) “they may help us to decide whether an outcome has been achieved in compliance with the Principles.” In Chapter 5 of the Code, entitled “Your client and the court”, the Outcomes include, “you do not place yourself in contempt of court”, “you comply with your duties to the Court” and “where relevant, clients are informed of the circumstances in which your duties to the court outweigh your obligations to your client”. The Indicative Behaviours include
“not appearing as an advocate, or acting in litigation, if it is clear that you, or anyone within your firm, will be called as a witness in the matter unless you are satisfied that this will not prejudice your independence as an advocate, or litigator, or the interests of your clients or the interests of justice.”
  1. Mr Cohen had not considered whether it was appropriate for him to act for the Defendants and to be a witness for them (indeed, to be the sole witness) but maintained that he was satisfied that there was no prejudice to his independence or to his clients or to the interests of justice. However, as became clear in cross-examination, Mr Cohen had on two occasions deliberately been untruthful in emails he had written, and there were a number of other ways (which I shall highlight in my findings of fact) in which his oral evidence conflicted with what he had said in his witness statements and in the documents. Mr Blaker, for Mr Afia, said that Mr Cohen’s failure to consider the SRA’s Code set the tone for Mr Cohen’s approach to giving evidence generally. I agree. In my view, Mr Cohen was far too close to the events which have given rise to this litigation, and took those events far too personally, to have properly been in a position to act for and give evidence on behalf of the Defendants in this case. Mr Cohen’s lack of objectivity has meant that I have had to test his oral and written evidence very carefully against the contemporaneous documents.wh

A CODA: THE SOLICITOR WAS TOO CLOSE TO THE CASE AND DID NOT TAKE A SENSIBLE AND PROPORTIONATE VIEW

  1. Mr Afia was asked in cross-examination whether he agreed that this claim had escalated out of all proportion to its value. He agreed, and for what it is worth so do I. But Mr Afia strikingly said that this was a matter of principle and it was a question of whether principles are worth something or not. It is impossible to gauge the attitude of the Defendants to the enormous sums which have been expended in this litigation, because to all intents and purposes they have remained invisible. It is a great pity that a more sensible and proportionate view of what was actually at stake was not taken by Mr Cohen on behalf of the Defendants, and I rather suspect that had Mr Cohen not become so personally involved matters might well have proceeded rather differently.

“HARD TO FATHOM” WHY THE SOLICITOR WAS TENDERED AS A WITNESS: PINEPORT LTD

We now turn to the judgment  of Master Marsh in  Pineport Limited -v- Grangeglen Ltd [2016] EWHC 1318 (Ch).  This was a relief from forfeiture hearing in which the only witness called by the defendant was their solicitor.  Things didn’t turn out well for the defendant…

KEY POINTS

  • The Defendant called their solicitor to give evidence. On most of the matters he had no first-hand knowledge at all.
  • The solicitor could not give any direct evidence about many of the issues in the case.
  • The claimant was granted relief from forfeiture.

THE CASE

The claimant company was seeking relief from forfeiture in relation to an underlease.

THE DEFENDANT’S EVIDENCE

The Master commented on the unusual decision by the defendant to call their own solicitor to give evidence.

  1. The Defendant called only Mr Thompson to give evidence. To my mind that was a surprising decision because Mr Thompson, as the Defendant’s solicitor, has only limited first-hand knowledge about a number of key matters. Entirely understandably, Mr Thompson was unable to provide helpful answers to many of the questions put to him in cross-examination because he had no relevant knowledge. His statement includes a number of paragraphs which are mere argument rather than evidence, including his opinion that the court should not exercise its equitable jurisdiction in favour of the Claimant. His evidence is based upon what he has been told by Mr Andrew Butler. In particular, Mr Thompson was not able to provide any real help about the schedule of expenditure the Defendant claims to have incurred as a result of the forfeiture amounting to £66,717.02, save for those items relating to his firm’s legal costs. I accept Mr Thompson’s evidence about his conversation with Tulsi Shah of Makwanas Solicitors on 8 August 2014 which is recorded in his attendance note. Mr Thompson has no recollection of being contacted by Shorab following the forfeiture.
  2. The correspondence and emails passing between Colliers and the Claimant were not illuminated by Mr Thompson’s evidence but they largely speak for themselves. It is not seriously in doubt that the Defendant, through its managing agent and solicitors made real efforts to recover, without taking enforcement action, the arrears which were due and the Claimant cannot maintain the suggestion that it was taken by surprise. There is, however, a most curious aspect of the Defendant’s case concerning the schedule of expenditure the Defendant now seeks if the court were to be inclined to grant relief. Mr Thompson says baldly in his statement that “the Defendant has suffered prejudice following the forfeiture of the Lease”. He then refers to the schedule of expenditure after which he says:
“… the Defendant has suffered prejudice as it has been unable to re-let the Forfeited Property for in excess of 18 months since forfeiture took place.”
However, when cross-examined, Mr Thompson was unable to explain further the assertion that prejudice had been suffered and he was unaware of anything the Defendant had been unable to do as a consequence of the sum due not having been paid….
  1. in the trial bundles but failed to take it up. As to remaining items:
i. Mr Thompson was not able to provide any help with the basis upon which the loss of rent is calculated. The schedule of loss refers to an email from Mr Butler but it has not been disclosed.
ii. He was able to provide a limited amount of help about the claim for legal expenses. He said much of the work which has been invoiced was carried out by him at a charging rate between £200 and £225 per hour. However, he said the Defendant was not relying on any of the invoices.
iii. He was unable to provide any help about the calculation of service charges after the forfeiture and has not seen the annual certificate which the underlease requires to correct payments on account.
iv. His understanding, without having first-hand knowledge, is that the concrete barriers installed in the parking area were there to maintain the security of the unit by stopping anyone parking close to the shutters of Unit 4.
  1. I have been provided with submissions by both parties together with the invoices and other documents the Defendant wishes to rely on but failed to disclose. The court is asked to admit them. The Claimant’s response is qualified. Some of the items are accepted as proper items to be included in the tally of sums payable as a condition of the grant of relief, without accepting that such sums are due as a debt. In those instances the presence or otherwise of the invoices makes no difference. As to the remaining items, the Claimant says the court should decline to admit the invoices.
  2. It is clearly unsatisfactory for documents to be produced in the course of a short trial without the other party having an opportunity to consider them and at a moment of the trial when the witness who relies on such documents has already been cross-examined and has said in clear terms that additional documents are not relied upon. I can see no good reason why these additional documents should be admitted. The Defendant had an ample opportunity to prepare its case. The basis upon which disclosure was ordered was that each party was required to disclose the documents relied upon. The Defendant has proceeded on the basis that it did not rely upon the invoices and this was confirmed by Mr Thompson. As the only witness called by the Defendant he was not in a position to speak to any of the invoices other than those rendered by his firm and in many instances the invoices do not speak for themselves. Furthermore, not only were they were produced at a very late stage of the trial but without there being any adequate excuse for their omission. Indeed, I have a strong sense that they were only produced in an attempt to bolster Mr Thompson’s evidence when it must have been clear before the trial that he would be unable to help the court about most of the expenses claimed. It remains hard to fathom why he was tendered as a witness instead of someone with relevant knowledge. For all those reasons I decline to exercise my discretion to admit the invoices which were provided to me after the trial.”

THAT OLD CHESTNUT: THE LAWYER WHO USES A “WITNESS STATEMENT” MAKES SUBMISSIONS RATHER THAN GIVE EVIDENCE

This blog has looked many times at the dangers of lawyers giving evidence when that “evidence” is in fact a set of legal submissions.   It is clear that this issue is not confined to one jurisdiction. This can be seen from the judgment of Mr Justice Garrett Simons in the case of McElvaney v Standards in Public Office Commission [2019] IEHC 644. This is a different jurisdiction but is an example of a judge taking the view that using an affidavit to make submissions is not desirable conduct.

THE CASE

The applicant had failed in judicial review proceedings.  The hearing was concerned with the applicant’s argument that, despite having been unsuccessful, he should not have to pay the respondent’s costs.  One issue that arose was the conduct of the applicant’s solicitors.

THE AFFIDAVIT THAT ENGAGED WITH LEGAL SUBMISSIONS

The judge, in refusing the applicant’s application and ordering that he pay the costs, commented on one particular aspect of the conduct of the case.

 

9. The court was also concerned with the fact that the solicitor acting on behalf of the applicant filed an affidavit which did not comply with the rules and, in particular, engaged entirely inappropriately with legal submissions. The court must maintain discipline over its proceedings and it seem to me that in a case such as this where the applicant and its legal advisors have behaved in manner which the court has been critical of, it would be entirely inappropriate to reward that behaviour by departing from the ordinary rule that costs follow the event.
10. So, in summary, therefore, I am satisfied that this is a case where costs should follow the event. The application for judicial review was dismissed in its entirety, and there was no factor which would indicate that anything other than the ordinary rule should apply. In addition to that, I am satisfied that, given the conduct of the applicant and its legal advisors, it would be inappropriate,  to reward that behaviour by departing from the ordinary rule that costs follow the event.”

THE SOLO CASE

I wrote last week about the judgment in Skatteforvaltningen (The Danish Customs And Tax Administration) v Solo Capital Partners LLP & Ors [2020] EWHC 1624 (Comm).  This case exemplifies the real dangers (and massive expense) involved when solicitors start using a witness statement as a vehicle for legal argument.

“My criticism concerns, rather, the content and length of the statements. They were, to a substantial extent, not witness evidence, but argument. The parties have therefore expended the time and effort, at no doubt very considerable cost, to argue the summary judgment application twice over, once in writing through the solicitors’ witness statements, then again at the hearing.”

*Remotely, by Zoom.