WHEN JUDGE READS A DRAFT STATEMENT AND A FINAL STATEMENT (& THERE ARE SOME IMPORTANT DIFFERENCES): LITIGANT REFUSED PERMISSION TO RELY ON EVIDENCE THAT COULD HAVE BEEN BEFORE THE COURT AT THE ORIGINAL HEARING

The judgment of Mr Justice Francis in Brack v Brack [2020] EWHC 2142 (Fam) is an example of a case where the judge has the opportunity to see a draft statement and a final statement.  The judge struck out an application where a party was attempting to rely on matters that could have been before the court at a hearing, they had been deliberately removed from a witness statement. An earlier (undisclosed) statement referred to the matters, the statement used at the hearing did not.

“I now have two versions of her statement, but the one that the wife relied on in court, and which formed part of the court bundle in front of me in 2016, made no reference to this email exchange. At that stage (December 2016) I did not have the earlier signed but unused statement. As it happens, that statement was accidentally produced by the wife’s solicitors when preparing the bundle for the May 2020 hearing.”

THE CASE

At a hearing in June 2016 the wife was not wholly successful in financial remedy proceedings, in particular in relation to pre-nuptial agreements.  The matter went to the Court of Appeal and was remitted back to the judge.   In 2020 the wife applied to set aside the order made in 2016. The grounds of the application were that the court did not consider two emails.  However those emails had been referred to in a draft (but signed) statement that

THE JUDGMENT

The judge set out the issues and then noted that he now had two statements made by the wife.  One (a signed “draft”) referred to the emails in question. The other (which was the one disclosed and relied upon at the initial hearing) did not.

1. 1. 1. At an early stage in the proceedings (January 2016), the wife was ordered by Moylan J (as he then was) to file a statement about the circumstances of the making of the prenuptial agreements. I now have two versions of her statement, but the one that the wife relied on in court, and which formed part of the court bundle in front of me in 2016, made no reference to this email exchange. At that stage (December 2016) I did not have the earlier signed but unused statement. As it happens, that statement was accidentally produced by the wife’s solicitors when preparing the bundle for the May 2020 hearing. Whatever the legal arguments may be about the admissibility of that statement, Mr Chamberlayne, on instructions, properly agreed that I should read it and accepts that it forms part of the evidence that I am now considering. The wife’s solicitors initially referred to this earlier statement as a “draft”, but when it was pointed out by the husband’s solicitors that it had been signed, they accepted that it was, indeed, a statement signed by the wife. There are some important and significant differences between the signed, but unused, statement and the signed, but used, statement. In particular, the unused statement includes this passage:

“Kenny told me that the prenuptial was about taking care of me, about protecting me and to enable us to sort things out between ourselves without lawyers if we ever fell out. He repeatedly told me I will look after you, you will not have to worry this is just a piece of paper. He told me I have always taken care of you and always will because I love you.“

It is neither possible nor necessary for me to know why these passages were abandoned in the statement that was actually used. However, it is reasonable to conclude that this discarded passage was drafted with the husband’s email of 23 July 2015 in mind.

1. 1. The discarded statement contains the assertion that the husband told the wife that they would be able “to sort things out between ourselves without lawyers if we ever fell out” and that “we didn’t really discuss [that PNA] in the context of divorce”. In the statement that was actually used, these two elements had been deleted. There was no reference to them being able to sort things out between themselves and instead of there being no discussion “in the context of a divorce”, the wife then stated, “he told me that if we divorced I would carry on financially just as before”. I agree with the submission made by Mr Marks and Mr Mitchell that it is undeniable that a decision was taken not to run the case that the husband told the wife that if they were able to sort things out without lawyers they could do so. This was an assertion made by the wife in the signed but un-served statement but not in the statement relied upon.

1. 1. What the wife now seeks to do, almost 4 years later, is to seek to reopen her case to rely on something that she discarded between her first signed statement and second signed statement.

1. 1. In addition to the decision not to use the email the for the purposes of the 2016 hearing, Mr Marks identifies three further occasions when the wife could have decided to seek to rely on the “new” evidence:

i) The first is the phase between the end of the hearing (18 November 2016) and the circulation of a draft Judgment on 22 December 2016. The wife asserts in her notice of application that she found the “new” evidence on 22 November 2016, i.e. only four days after the conclusion of the hearing, but well before Judgment. It is not at all unusual for a litigant to seek to produce evidence after the hearing has finished and, if the wife sought then to rely on these emails she should, through her counsel, immediately have contacted me and sought my permission to re-open the hearing. The parties knew that Judgment would be delayed for a few weeks because I was fully listed for the rest of that term and I told them that there would be a delay of a few weeks before Judgment but that I hoped to circulate a draft before Christmas (which is what happened).

ii) The second occasion of delay relied upon by Mr Marks and Mr Mitchell is the time between handing down of the Judgment on 22 December 2016 and the perfection of the order in August 2017. During this phase of the proceedings, the wife could have invited me to invoke what is referred to as the Barrell jurisdiction, asking me to change my decision in the light of new evidence that had come to light.

iii) The third, and final, period of delay referred to by Mr Marks and Mr Mitchell is the period between 22 November 2016 and 9 December 2019, a period exceeding three years, during which the wife could have sought to put in this new evidence.

1. 1. The matter goes further still: importantly, the wife raised this very matter with the Court of Appeal when she invited them to admit fresh evidence, namely these very emails with which I am concerned in this judgement. The order signed by Peter Jackson LJ states:

“Permission to file fresh evidence is refused permission to appeal on ground 4 is consequently refused.“

Ground 4 started with these words:

“Ground 4 relies on the wife producing new evidence, in the form of two emails which pass between her and the husband in July 2015. As part of the appeal she seeks permission to adduce the two emails.“

Ground 4 then went on to recite the very parts of the emails with which I have been concerned in this Judgment. Paragraph 4.5 of the grounds of appeal says:

“that email is the clearest written confirmation from the husband himself that he did indeed promise the wife that the zero provision which the PNAs gave her would not be the true outcome on divorce.“

When giving his reasons for refusing permission to appeal on Ground 4, Peter Jackson LJ stated:

“Permission to file fresh evidence is refused. Although the Ladd v Marshall criteria may not be strictly applied where to do so would prejudice the welfare of children, that is not a strong consideration here. However, there is a strong public interest in the finality of litigation, and in this case (leaving aside the issue of privilege) the consequence of admitting fresh evidence would probably be the case would have to be remitted to the judge for the primary finding of fact to be reconsidered. This would add further to the delay and expense that has already risen. Finally, and decisively, no good reason whatever has been given for the failure to produce this evidence at trial.
Permission to appeal on Ground 4 is therefore refused“.

1. 1. It is, in my judgement, remarkable that, having been so robustly turned down by the Court of Appeal on this issue, the wife now seeks through another route to introduce the evidence which the Court of Appeal said was too late. Importantly, the Court of Appeal said that no good reason had been given for the failure to produce the evidence at trial. Does the same apply now as applied when the Court of Appeal ruled against the wife on Ground 4 in December 2018? Mr Chamberlayne says not and I now turn to address the case that he has forcefully advanced.

The wife’s response

1. 1. Mr Chamberlayne puts his case this way:

“Peter Jackson LJ’s decision to refuse permission was in line with the law at the time. At that time there was binding Court of Appeal authority in the form of the then recent (March 2017) Court of Appeal decision in Takhar v Gracefield Developments (and two other Court of Appeal decisions to the same effect) that where an application to admit new evidence to set aside/appeal an earlier decision was based on a claim that the new evidence showed fraud, permission would be refused unless the appellant could show that the material could not have been produced at the original hearing if reasonable diligence had been used. However, the Supreme Court, sitting as a court of seven judges, reversed Takhar and the other Court of Appeal authorities on 29 March 2019 – UKSC 2019 13. The law now is that fraud unravels all and therefore:-

If decisive new evidence is deployed to establish the fraud, an action to set aside the judgment will lie irrespective of whether it could reasonably have been deployed on the earlier occasion unless a deliberate decision was then taken not to investigate or rely on the material.

“It appears to me that the policy arguments for permitting a litigant to apply to have judgment set aside where it can be shown that it has been obtained by fraud are overwhelming. “

And Lord Sumption made it clear that it was not a discretionary issue – if it was established that there had been fraud, then it was not a question of ‘degrees of dishonesty’, with a flexible approach being taken to set aside:-

“Nor do I accept Lord Briggs’ view that a more flexible and fact-sensitive approach may be required in order to distinguish between degrees of dishonesty. I think that this would introduce an unacceptable element of discretion into the enforcement of a substantive right. The standard of proof for fraud is high, and rightly so. But once it is satisfied, there are no degrees of fraud which can affect the right to have the judgment set aside.”

1. 1. In my judgement, the straightforward and decisive answer to Mr Chamberlayne’s case lies in the last phrase of Mr Chamberlayne’s quoted passage, namely:

“….unless a deliberate decision was then taken not to investigate or rely on the material.”

1. 1. For reasons set out above, it is clear that a deliberate decision was taken not to rely on the material now asserted by her to be “new” and “decisive”. Thus I am constrained to agree with Mr Marks and Mr Mitchell that the wife’s application is “fatally flawed” and that it should be struck out. Even were I to have a discretion whether to admit the material, I would decisively exercise my discretion against the admission of the material, given the delay between the “discovery” of the material in November 2016 and her attempt to introduce it in November 2019. I agree with Mr Marks and Mr Mitchell that (at least) the following lacunae exist in the wife’s case, were I to be in a position where I were exercising my discretion whether to admit the material:

i) why it was not part of her case at the final hearing that the husband had told her that he would be prepared to agree to make financial provision for her (which is the admission that he is now said to have made);

ii) whether she told her solicitor about the email the day it was received (and if not why not);

iii) how the email eluded her alleged physical and electronic searches she was required and twice said to have undertaken for material evidence;

iv) how she came across it, i.e. what she was doing at the time and for what purpose;

v) when and why she told her solicitors about the email;

vi) why no application was made to reopen the evidence during the four weeks that judgment was reserved, or to invoke the Barrell jurisdiction in the more than seven months between delivery of the draft judgment and finalisation of the order;

vii) why no application was made to set-aside the findings before more than three years had elapsed since she discovered the email.

1. 1. Accordingly, in my judgement, even if Takhar does, in principle, allow me to go beyond the Court of Appeal’s determination on the “new” material (as asserted by Mr Chamberlayne):

i) Takhar makes it clear that there is an exception if a decision has been made not to rely on the material. Such a decision was plainly made here as set out in detail above;

ii) Were I called upon to exercise any discretion to admit the “new” material, I would not do so for the reasons set out above.

1. 1. Finally, in the context of Takhar, it is worth noting the facts of that case. There, the claimant had not realised that her signature on a crucial document had been forged, indeed, she believed that she might have signed it. It was only after judgment – the case having proceeded on the assumption that she had signed the document – that she obtained evidence that in fact her signature had been forged. That gave rise to a wholly new cause of action, namely for fraud which, notwithstanding the prior judgment in the action which she had lost, she was permitted by the Supreme Court to advance as a fresh claim. The judgments in that case raise the possibility, obiter, that had she even argued first time around that the signature was forged, albeit that she had lacked the evidence to prove it, she might not have been permitted to pursue her fresh claim.

1. 1. Here, the wife both argued that the husband was not telling the truth about what was said to her about the effect of the prenuptial agreements and had possession of the piece of evidence which she now asserts establishes the truth of her case. It is a long way removed from the facts of Takhar.

1. 1. On 16 June 2020, Mr Chamberlayne e-mailed me to tell me that “a new Supreme Court decision on strike outs has just emerged”. Naturally, I agreed to consider it, given that I had not yet written my Judgment. The case referred to by Mr Chamberlayne is Summers v Fairclough Homes Ltd [2012] UKSC 26. That case establishes that the court has power under the CPR and under its inherent jurisdiction to strike out a statement of case at any stage of the proceedings, even when it had already been determined that the claimant was, in principle, entitled to damages in an ascertained sum. However, that power was to be exercised only where it was just and proportionate to do so, and that was likely to be only in very exceptional circumstances. Mr Chamberlayne’s complaint is that the wife “has had no opportunity to present her evidence or for the court to hear from H about the manifestly false evidence he gave at the original trial”. As I have set out above, the wife has had since (at least) November 2016 to show me the “new” material. In fact, as the unused but signed statement shows, she has in fact had since before the 2016 hearing started the opportunity of showing me the material.

1. 1. Mr Marks complained in an email to me dated 16 June 2020 that it was “far too late for further argument or submissions to be made”. However, given that I had not written my Judgment when Mr Chamberlayne’s e-mail was received I thought it better to consider the Supreme Court decision to which he had referred. Plainly, if it was material to my decision, I would not want inadvertently to hand down a Judgment which was inconsistent with a binding decision from a superior court.

1. Having considered the Fairclough Homes case, I agree with Mr Marks that the decision has “nothing to do with the situation in this case” and is confined to the subject matter of that appeal.

Conclusion

1. Accordingly, I accede to the application to strike out the wife’s application to set aside my finding in the 2016 hearing.