PROVING THINGS 185: SAYING “I’M BROKE” DOES NOT PROVE IMPECUNIOSITY: “THE DEFENDANT IS ENTITLED TO KNOW THE CASE THEY HAVE TO MEET”

November 5, 2020 · by · in Civil evidence, Damages, Witness statements

We are returning again to the Court of Appeal decision in Diriye v Bojaj & Anor [2020] EWCA Civ 1400. This time concentrating upon the Court’s comments in relation to the need to prove impecuniosity and the claimant’s failure to do so, in a Reply and in their evidence.

“They  are entitled to know the case they have to meet. They should not be expected to have to prepare for a trial where the critical item of claim depends on a one line assertion, and hoping that, as a result of the cross-examination of the appellant, the judge will reject the claim. That is not how civil litigation is supposed to work post-CPR.”

THE CASE

The claimant was pursuing an action that included a claim for car hire. The issue of the claimant’s impecuniosity is an important element in such claims. An impecunious claimant can recover a higher rate for the hire.  The judge made an order that the claimant set out details of impecuniosity.  The Reply was served late and the claimant debarred from relying on this issue, an application for relief from sanctions was refused and upheld on appeal. Here, however, we are concerned with the claimant’s failure to plead and prove this important element of the claim.

THE JUDGMENT ON THIS ISSUE

The judgment of Coulson LJ sets out the procedural history and why it was the judge made a peremptory order in relation to service of a Reply in relation to impecuniosity.

    1. By early March 2018, the appellant had still not produced any proper pleading or other information in support of his assertion of impecuniosity. On 7 March 2018, Deputy District Judge Walder allocated the claim to the fast track and fixed a trial date for 1 November 2018. In respect of impecuniosity, he made an Unless Order in the following terms:
“The claimant shall be debarred from relying upon the facts of impecuniosity for the purposes of determining the appropriate rate of hire unless

(i) By 4:00pm on the 4th April 2018, the claimant files and serves a reply to the defence setting out all facts in support of any assertion that the claimant was impecunious at the commencement of and during the hire of the vehicle in question, and

(ii) By 4:00pm on the 18th April 2018, the claimant serves copies of the following documents which are in his control:

1) Copies of the claimant’s wage slips or equivalent documentation evidencing the approximate level of available income to the claimant for a period of three months pre-accident and covering the period of hire, and

2) Copy bank and credit card statements for a period of three months pre-accident and covering the period of hire.”

  1. Mr Peter submitted on the one hand that orders of this kind were not uncommon in RTA/Whiplash claims, but subsequently argued – for the first time – that an Unless Order in these terms should not have been made at all, because there had been no prior breach of an ‘ordinary’ order. In my view, the appellant ought to have provided the necessary pleading in respect of impecuniosity at the outset of the proceedings so that, in the absence of that information, the Unless Order was entirely proper. If, as Mr Peter indicated, such orders are not uncommon, then that can only be because claimants in these sorts of cases are taking too lax an approach to the obligation to plead and prove impecuniosity so clearly spelt out in Zurich. That is a point to which I return below.

THE CLAIMANT’S REPLY AND WITNESS STATEMENT

The Reply was served late.  However it was held that even if it had been served timeously it would not have complied. Further the claimant’s witness statement compounded the situation.

    1. I consider that, on analysis, the Reply, even when served, did not comply in substance with the Unless Order[1]. That Order required the Reply to set out “all the facts” relied on in support of the assertion of impecuniosity. The appellant was a minicab driver, and that was the source of his income. So, the Reply needed to set out what his income was and what his expenditure was, and how those figures meant that he could not afford to hire a replacement vehicle. Yet all the Reply said on this topic was at paragraph 5, which stated simply that “As he earned cash as a minicab driver, he expended the same on bills and daily living allowances for his family”. Nothing else of relevance was provided. No figures for income were pleaded at all.
    2. For completeness, I should say that this position was not improved by the appellant’s subsequent witness statement for the trial, served well before the hearing before the DJ in August 2018, where on the same subject, the appellant just said:
“I had no money to repair or buy another car and all my accounts were close(d) to their overdraft limits and my credit cards had reached the maximum credit card limit. I have a bad credit rating as I have outstanding credit card bills so I could not get a loan.”
  1. Although this issue was dealt with by the DJ and by the judge under stage 3 of Denton (in particular the DJ’s comments which I have set out in italics at paragraph 14 above), I consider that they may arise more conveniently under stage 1, particularly given Mr Peter’s focus on the question of the significance of the breach. If I am right and the Reply did not comply with the substance of the Unless Order in any event, the significance of the breach could hardly be greater[2].
  2. Mr Peter disagreed with that analysis of the Reply and repeatedly drew a distinction between a pleading and the evidence required to support it. Stripped of its repetition, that argument was to the effect that a claimant in the position of the appellant was entitled to assert impecuniosity by way of a bald statement, and then seek to adduce evidence later on to embellish it. He said that, although that might mean the case would go badly for the appellant at trial, he should not be shut out from pursuing his claim for credit hire in court.
  3. I consider that there are a number of fundamental errors in that submission. The first is that it seeks to get around the clear wording of the Unless Order, which required the pleading of “all facts in support of any assertion” of impecuniosity. On this issue, therefore, there was no room for any gap between the pleading and the statement. Secondly, the submission seemed to be based on the incorrect notion that a claimant was entitled to advance a rubbishy case in stages, from pleading to witness statement to trial, presumably in the hope that, by the time the trial came on, there was a commercial imperative on the part of the respondents to settle the case.
  4. Thirdly, Mr Peter’s approach ignored the respondents’ position. They are entitled to know the case they have to meet. They should not be expected to have to prepare for a trial where the critical item of claim depends on a one line assertion, and hoping that, as a result of the cross-examination of the appellant, the judge will reject the claim. That is not how civil litigation is supposed to work post-CPR. And fourthly, the argument was unsupported on the facts. I have already set out the one line assertion in the Reply (paragraph 48 above) and the equally unrevealing evidence in the witness statement (paragraph 49 above). So the Reply did not in fact herald a witness statement with more detailed support for the impecuniosity claim.
  5. Accordingly, I consider that, even if the Reply had been served on time, the document itself failed to comply with the substance of the Unless Order. Even if it is taken together with the witness statement, the Reply created precisely the situation that the Unless Order was designed to avoid: a simple assertion of impecuniosity, with no facts set out to support it. The breach of the Unless Order was therefore serious and significant.
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